How this home affordability calculator works
Lenders mostly judge a mortgage with two ratios. The front-end ratio compares your total housing payment (principal, interest, property tax and insurance) with your gross monthly income. The back-end ratio adds your other monthly debts. A common guideline is 28% and 36%, and the calculator uses whichever limit is lower for you.
Price = (maximum housing payment − monthly insurance + payment factor × down payment) ÷ (payment factor + monthly property tax rate).
The payment factor is the monthly principal-and-interest cost per dollar borrowed at your rate and term. Property tax rises with the price, which is why it is solved together with the loan amount.
How to read the results
- Maximum home price. The highest price that keeps both ratios inside the guideline, given your down payment.
- Binding limit. Which ratio is the constraint. If it is the back-end ratio, paying down other debts raises what you can afford.
- Stretch price. What you would reach at a 43% back-end ratio, which some lenders accept with strong credit and savings. It is a ceiling, not a recommendation.
- The chart. It shows how the affordable price moves with the interest rate. A one-point change in rate can move your budget by tens of thousands of dollars.
What the 28/36 guideline is, and is not
The 28/36 rule is a common lender and planning guideline, not a legal limit and not a CFPB rule. Actual approval depends on credit score, loan type, down payment, reserves and the lender’s own overlays. Approval is also not the same as comfort: budget for maintenance, utilities and the savings you want to keep.
To see the full payment for a specific price, use the mortgage payment calculator.
Frequently asked questions
What is the 28/36 rule?
It is a common guideline that your housing payment should be at most 28% of gross monthly income, and your housing payment plus other monthly debts at most 36%. It is a planning benchmark used by many lenders, not a law, and approval depends on your full profile.
Can I buy a house with a higher debt-to-income ratio?
Sometimes. Some loan programs and lenders approve ratios around 43% or higher when credit, savings and down payment are strong. The stretch price in the calculator shows that ceiling, but a higher ratio leaves less room for other expenses.
Does the calculator include taxes and insurance?
Yes. Property tax and homeowners insurance are part of the housing payment used in the ratios. They reduce the loan you can afford because they take up part of the payment limit.
How does the interest rate change what I can afford?
A higher rate raises the monthly cost of each dollar borrowed, so the same payment supports a smaller loan. The chart shows the affordable price across rates two points above and below yours.
What does the calculator leave out?
Mortgage insurance for small down payments, HOA dues, closing costs, your credit score and the lender’s own rules. Use it to set a realistic range before you ask lenders for a pre-approval.
Sources
This tool is for general information and illustration. It is not personalized advice. Confirm the figures with a qualified professional. See our editorial standards.
