How Much House Can I Afford

Enter your income, debts and down payment for a rule-of-thumb home price.

How to use ↓

Affordability

Starting values are examples, not current rates or averages. Replace them with yours.

Step 1 Income and debts

Before taxes. All borrowers combined.

Car, student loan, card minimums. Not the new housing payment.

Step 2 Loan and housing costs

As a percent of the home price. The starting value is an example. If you clear it, tax counts as $0 and the price is overstated.

The starting value is an example. If you clear it, insurance counts as $0 and the price is overstated.

The starting value is an example: ask a lender for a quote. Used only when the loan is above 80% of the price. With less than 20% down, a blank PMI rate overstates the price.

Enter 0 if there are none. A blank counts as $0.

Step 3 Ratios

Your setting. 28 is the common rule of thumb.

Your setting. 36 is the common rule of thumb.

Step 4 Calculate

How to use

  1. Enter your gross yearly income and your monthly debt payments.
  2. Enter your down payment, as dollars or a percent.
  3. Enter the rate, the term and your housing costs.
  4. Press Calculate to see a rule-of-thumb price.

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The 28/36 rule of thumb

A common guideline says housing should take no more than about 28% of gross monthly income, and all debts no more than about 36%. The calculator takes the lower of the two limits as your monthly budget, then finds the highest price whose full monthly payment fits inside it.

The payment counts principal and interest, property tax, insurance, PMI and HOA dues, but only the ones you enter. If tax or insurance is left blank it counts as $0 and the price is overstated, so the calculator shows a warning and starting values you can edit. The limits are settings you can change, because lenders may allow higher or lower ratios depending on credit score, savings, loan type and other factors.

28/36 is a common rule of thumb, not a lending rule. Fannie Mae allows total debt-to-income up to 36% for manually underwritten loans (up to 45% or 50% in some cases) and FHA manual underwriting uses 31/43. This is an estimate, not a pre-approval, and it does not know your credit or what a lender would offer.

Worked example

With $120,000 of gross income, monthly income is $10,000. The 28% housing limit is $2,800. The 36% total debt limit is $3,600, and with $1,000 of monthly debts that leaves $2,600. The lower figure, $2,600.00, is the budget (back-end (total debt) ratio).

At 6.5% over 30 years, with 1.1% property tax, $1,500 a year of insurance, 0.5% PMI (an example rate; the loan is above 80% of the price) and $60,000 down, that budget supports a price of about $376,173. With no other debts the budget is $2,800.00 and the price about $402,303. Example numbers only.

FAQ

Is 28/36 a rule lenders must follow?

No. It is a long-standing guideline. Lenders set their own limits, which differ by loan type, and look at more than income and debts.

What counts as monthly debts?

Recurring payments such as car loans, student loans and card minimums. Leave out the new housing payment and everyday living costs.

Why does the price change with the down payment?

A larger down payment means a smaller loan for the same price, so more of the budget is left for the price itself.

Does the result include closing costs?

No. Use the closing cost calculator to estimate the cash needed on top of the down payment.