How much house can I afford based on my income?

Use the 28/36 rule: Your total housing costs should not exceed 28% of your gross monthly income, and your total debt payments (housing + other debts) should not exceed 36% of your gross monthly income. Our affordability calculator automatically calculates this for you.

What is the 28/36 rule?

The 28/36 rule is a guideline lenders use: 28% of your gross monthly income should go to housing costs (mortgage, taxes, insurance), and 36% should cover all debts (housing + credit cards, car loans, student loans, etc.).

What is debt-to-income ratio and why does it matter?

Your debt-to-income (DTI) ratio is the percentage of your monthly income that goes toward debt payments. Lenders use this to determine if you can afford a mortgage. A lower DTI ratio means you're more likely to be approved and get better interest rates.

Affordability Calculator - How Much House Can I Afford?

How Much House Can I Afford?

Determining how much house you can afford is one of the most important steps in the homebuying process. Our affordability calculator uses the industry-standard 28/36 rule to help you understand your maximum home price based on your financial situation.

Understanding the 28/36 Rule

Lenders use the 28/36 rule to determine mortgage affordability:

28% Rule (Front-end DTI): Your total housing costs (mortgage + taxes + insurance) should not exceed 28% of your gross monthly income
36% Rule (Back-end DTI): Your total debt payments (housing + credit cards + car loans + student loans, etc.) should not exceed 36% of your gross monthly income

Example: If you earn $100,000 per year ($8,333/month), your housing costs should be ≤ $2,333/month (28%), and your total debts should be ≤ $3,000/month (36%).

What Our Affordability Calculator Shows

Our calculator provides:

Maximum Home Price: The highest price you can afford based on your income and debt
Maximum Monthly Payment: Your total monthly housing payment limit
Recommended Down Payment: Suggested down payment amount (typically 20% to avoid PMI)
Loan Amount: The mortgage amount you'll need

Factors That Affect Affordability

Annual Income: Your gross (before-tax) annual income
Monthly Debt Payments: Credit cards, car loans, student loans, personal loans
Down Payment: The more you put down, the less you need to borrow
Interest Rate: Higher rates mean higher monthly payments
Loan Term: Longer terms (30 years) = lower payments but more interest

Tips for Improving Your Affordability

1. Reduce Your Debt

Paying down credit cards, car loans, and other debts before buying a home can significantly increase the amount you can afford. Lower monthly debt payments mean more room in your budget for housing costs.

2. Save for a Larger Down Payment

A larger down payment means:

Lower loan amount = lower monthly payment
No PMI (if 20% or more down)
Better interest rates
More equity from day one

3. Improve Your Credit Score

A higher credit score can help you qualify for lower interest rates, which means:

Lower monthly payments
Ability to afford a more expensive home
Less interest paid over the life of the loan

4. Consider a Longer Loan Term

A 30-year mortgage has lower monthly payments than a 15-year mortgage, allowing you to afford a more expensive home. However, you'll pay more interest over time. You can always make extra payments to pay it off faster.

5. Get Pre-Approved

While our affordability calculator gives you a good estimate, getting pre-approved by a lender gives you:

Exact loan amount you qualify for
Current interest rates
Stronger negotiating power with sellers
Faster closing process

🏠 Affordability Calculator