EveryCalc

Home / Home Affordability Calculator

Home Affordability Calculator

How much house can you really afford? Enter your income and debts — we apply the lender-standard 28/36 rule to find your maximum home price.

Your finances

Maximum home price you can afford
$0
–
Max monthly housing budget
$0
28% rule cap
$0
36% rule cap
$0
Max loan amount
$0

Based on principal and interest only. Property tax, insurance, PMI and HOA will reduce the price you can afford — budget for them separately with our mortgage calculator.

What is the 28/36 rule?

Lenders qualify borrowers with two debt-to-income ratios. The front-end ratio caps housing costs (principal, interest, tax, insurance, HOA) at 28% of gross monthly income. The back-end ratio caps all monthly debt payments — housing plus car loans, student loans, and minimum credit card payments — at 36%. Your affordable housing budget is whichever cap is lower, which is why heavy non-housing debt shrinks the home you can buy even with a strong salary.

How the maximum price is computed

Once the monthly housing budget is known, the calculator reverses the mortgage payment formula to find the largest loan that budget supports:

Loan = Payment × ((1+r)n − 1) / (r(1+r)n)

Adding your down payment gives the maximum home price. Note this covers principal and interest only — in high-tax areas, property tax and insurance can easily consume 20–30% of the housing budget, so treat this figure as a ceiling and run the mortgage calculator on any specific home.

Example: With $120,000 income ($10,000/month), the 28% cap is $2,800/month. With $500 in other debts, the 36% cap is $3,600 − $500 = $3,100. The lower cap wins: $2,800/month. At 6.5% for 30 years that supports about a $443,000 loan — plus an $80,000 down payment, a maximum price near $523,000.

Affordable vs. maximum

The maximum is not a target. It assumes stable income, no major repairs, and no lifestyle spending beyond debts. Many financial planners suggest keeping housing closer to 20–25% of income so one surprise — a roof, a job change, a rate reset — does not become a crisis. Use the maximum to set your search ceiling, then shop comfortably below it.

Affordability FAQs

What is the 28/36 rule?

Housing costs at most 28% of gross monthly income; all debts at most 36%. Lenders use these ratios to qualify borrowers, and this calculator applies both, using the lower result.

How much income do I need to buy a $400,000 house?

At 6.5% with 20% down, expect roughly $2,540/month in housing costs, implying about $109,000 annual income under the 28% rule — before other debts. Enter your exact numbers above.

Do lenders use gross or net income?

Gross (pre-tax) income. This calculator does the same.

Should I buy the maximum home I can afford?

Usually not. The max assumes everything goes right. Targeting 20–25% of income on housing leaves room for repairs, rate changes, and real life.