1
Mortgage & Loans
Home Affordability Calculator — How Much House Can I Afford?
The 28/36 rule lenders actually use to decide how much house you can afford
Before you fall in love with a listing, the real question is how much house can I afford without stretching your budget to the breaking point. Lenders answer this with two simple guardrails known as the 28/36 rule, and this calculator runs the same math they do — using your gross income, existing debts, down payment, and today's interest rate to back out a realistic home price.
Here's how the rule works. Your front-end ratio says your monthly housing payment shouldn't exceed 28% of your gross monthly income. Your back-end ratio says your total monthly debt — housing plus car loans, student loans, credit cards, and any other minimums — shouldn't exceed 36%. The lower of those two ceilings is the one that binds, and it sets the maximum payment you can responsibly carry.
The formula, step by step:
- Gross monthly income = annual income ÷ 12.
- Front-end cap = income × 0.28. Back-end cap = income × 0.36 − your existing monthly debts.
- Your max housing payment is the smaller of those two.
- Subtract monthly property tax + insurance to get the dollars left for principal & interest (P&I).
- Back the affordable loan amount out of that P&I using the mortgage formula, then add your down payment to get the affordable home price.
Worked example. Say you earn $90,000/year (so $7,500/month), carry $500/month in other debt, have $40,000 saved for a down payment, and rates are 6.5% on a 30-year loan, with $5,400/year ($450/month) budgeted for taxes and insurance. Front-end cap = 7,500 × 0.28 = $2,100. Back-end cap = 7,500 × 0.36 − 500 = $2,200. The front-end is lower, so your max housing payment is $2,100. Subtract $450 for taxes/insurance → $1,650 for P&I. At 6.5% over 30 years, $1,650/month supports a loan of about $261,000, and adding your $40,000 down payment gives an affordable home price of roughly $301,000.
The most common mistake is budgeting off gross income but forgetting your existing debts. A big car payment or student loan can drop your back-end ceiling below the 28% housing cap, which means your debts — not your income — are what limit your home price. This calculator surfaces exactly which constraint is binding so you know whether to shop for a bigger house or pay down a loan first.
This tool provides informational estimates only, not a loan pre-approval or financial advice; your actual budget depends on your credit score, lender, and full financial picture.
Calculator
Fill in the fields and click "Calculate" for instant results.
📰 Formula
• Gross monthly income = annual income ÷ 12 • Front-end cap (housing) = income × 0.28 • Back-end cap (total debt) = income × 0.36 − existing monthly debts • Max housing payment = min(front-end cap, back-end cap) • P&I budget = max housing payment − (annual tax + insurance ÷ 12) • Monthly rate r = APR ÷ 12 ÷ 100; n = years × 12 • Affordable loan = P&I × ((1 + r)ⁿ − 1) ÷ (r × (1 + r)ⁿ) • Affordable home price = affordable loan + down payment
📰 Formula
• Gross monthly income = annual income ÷ 12 • Front-end cap (housing) = income × 0.28 • Back-end cap (total debt) = income × 0.36 − existing monthly debts • Max housing payment = min(front-end cap, back-end cap) • P&I budget = max housing payment − (annual tax + insurance ÷ 12) • Monthly rate r = APR ÷ 12 ÷ 100; n = years × 12 • Affordable loan = P&I × ((1 + r)ⁿ − 1) ÷ (r × (1 + r)ⁿ) • Affordable home price = affordable loan + down payment
🧪 Worked examples
2
Example 2
3
Example 3
4
Example 4
⚠️ Common mistakes
- Budgeting off gross income but ignoring existing car, student and credit-card payments.
- Forgetting to carve out property taxes and insurance before sizing the loan.
- Plugging the yearly rate into the payment formula without first converting it to a monthly decimal (a 6.5% APR is 0.00542 per month, not 6.5).
- Assuming the 28% housing cap always binds — heavy debt can make the 36% rule the limit.
💡 Tips
- If the 36% back-end rule is binding, paying down a loan raises your affordable home price more than a raise would.
- A larger down payment lifts your home price dollar-for-dollar and can also lower your rate and remove PMI.
- Lenders may stretch past 28/36 with strong credit, but staying inside the rule protects your monthly cash flow.
Embed this calculator on your site
Copy the code below and paste it into the HTML of your site or blog.
<iframe src="https://www.calcnimbus.com/embed/home-affordability-calculator" width="100%" height="500" frameborder="0" style="border:1px solid #eee;border-radius:12px"></iframe>
❓ Frequently asked questions
How much house can I afford on my salary?
A common rule is that your home price is roughly 3 to 4 times your gross annual income, but the precise answer depends on your debts, down payment and interest rate. This calculator uses the 28/36 rule to size it: max housing payment is 28% of gross monthly income, capped so total debt stays under 36%.
What is the 28/36 rule?
It's the affordability guideline lenders use. The 28% front-end ratio limits your monthly housing payment to 28% of gross monthly income. The 36% back-end ratio limits all your monthly debt — housing plus car, student and credit-card payments — to 36%. The lower of the two caps sets your budget.
Does this use gross income or take-home pay?
The 28/36 rule uses gross (pre-tax) income, which is what lenders qualify you on. Enter your gross annual salary. Keep in mind that your take-home budget will feel tighter, so many buyers aim below the maximum the rule allows.
How much income do I need to afford a $400,000 house?
Roughly, with about 10% down and a 6.5% rate, a $400,000 home needs around $100,000–$120,000 in gross annual income to stay inside the 28/36 rule, assuming modest existing debt. More debt or a higher rate pushes the required income up.
Why does my existing debt lower how much house I can afford?
The 36% back-end rule counts all your monthly debt, so a $500 car payment eats directly into the room available for a mortgage. If your debts pull the 36% cap below the 28% housing cap, your debts — not your income — become the limit, which is why paying them down can raise your home price.
Does a bigger down payment let me afford more house?
Yes. Your affordable home price equals the loan the 28/36 rule supports plus your down payment, so every extra dollar down raises your price ceiling dollar-for-dollar. A larger down payment can also lower your rate and remove PMI, which frees up more of your payment for principal and interest.
Is property tax and insurance included in the affordability math?
Yes. The calculator subtracts your estimated monthly property tax and homeowners insurance from your housing budget before sizing the loan, because those escrowed costs are part of the payment lenders count toward your 28% housing cap.
Can I get approved for more than the 28/36 rule says?
Often, yes. Lenders may approve back-end ratios of 43% or higher for borrowers with strong credit, reserves or a large down payment, and some loan programs allow even more. The 28/36 rule is a conservative comfort zone, not a hard legal cap, but staying near it protects your monthly cash flow.
How accurate is this home affordability estimate?
It's a solid starting estimate based on standard lender ratios and the mortgage formula, but it's not a pre-approval. Your real budget depends on your credit score, loan program, actual rate, HOA dues, PMI and local tax rates, so treat the result as a planning range and confirm with a lender.