How Much House Can I Afford?

Enter your income, monthly debt payments and down payment. You'll get the maximum home price, loan amount and monthly housing payment under the standard 28/36 lending rule.

How the number is calculated

Your monthly gross income sets two ceilings: 28% of it for the total housing payment (the front-end ratio) and 36%of it minus your other monthly debts (the back-end ratio). The tighter of the two is your maximum monthly housing payment. From there, the tool works backward — subtracting the monthly cost of property tax and insurance, then converting the remaining principal-and-interest budget into a loan amount at your rate and term — and adds your down payment to get a home price.

Worked example

$120,000 income ($10,000/month), $500 of other debt, $60,000 down, 6.5% over 30 years, 1.5% tax and insurance:

Front-end cap: 28% × $10,000 = $2,800
Back-end cap: 36% × $10,000 − $500 = $3,100
Tighter of the two: $2,800/month for housing
That supports a loan near $360,000 and a home price around $420,000 with the $60,000 down.

Add $1,000 more monthly debt and the back-end cap drops to $2,100, cutting the affordable price by well over $100,000. See how much house can I affordfor the full breakdown, and pressure-test the buy decision itself with the rent vs buy calculator.

Why the maximum is not the target

Buying at the top of this number leaves nothing for maintenance (about 1% of the home value a year), rising taxes and insurance, or a lost income. A widely used safer target is a housing payment near 25% of take-home pay, not 28% of gross. Treat the figure below as a ceiling, not a goal.

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Frequently asked questions

What is the 28/36 rule?

A guideline lenders use: your total monthly housing payment (principal, interest, property tax, insurance, HOA, PMI) should stay under 28% of gross monthly income, and that payment plus all other debt (car loans, student loans, minimum card payments) should stay under 36%. Whichever limit is tighter caps what you can borrow.

Is this the same as a pre-approval?

No. This applies the 28/36 rule to the numbers you enter. A lender's pre-approval verifies your income, assets, credit and debts and may allow a debt-to-income ratio up to 43% (sometimes higher), so their number can be larger. Use this to set a target before you apply.

Why is the price I can afford lower than what a lender might approve?

A lender's maximum assumes nothing in your life changes. Real ownership adds maintenance (budget about 1% of the home value per year), higher utilities, and rising taxes and insurance. A common safer target is a housing payment near 25% of take-home pay rather than 28% of gross.

Does a bigger down payment let me afford more?

Yes, two ways: it directly reduces the loan for a given price, and reaching 20% down removes PMI, which lowers the monthly payment so more of your 28% budget can go toward principal and interest.

How do my other debts affect the number?

They come straight off the 36% back-end limit. $500/month of car and student-loan payments reduces the housing payment you qualify for by $500, which can cut the affordable price by $70,000–90,000 at current rates. Paying off a car before applying can meaningfully raise your budget.

What property tax and insurance rate should I use?

Combined, most areas run about 1.2% to 2.0% of the home's value per year. High-property-tax states like New Jersey, Illinois and Texas can exceed 2.5%. Check the actual effective property tax rate for the county you're buying in and add a homeowners insurance estimate.

Does this include PMI?

Not directly. If your down payment is under 20% of the resulting price, add roughly 0.3% to 1.5% of the loan per year for private mortgage insurance, which lowers the price you can afford. The estimate below assumes the full 28/36 budget goes to principal, interest, tax and insurance.

What if I'm buying with a partner?

Combine both gross incomes and both sets of monthly debts. Lenders underwrite the household, and both incomes and debts count.

Last reviewed: September 2026. Figures and formulas are checked against their published sources; see the site's data notes.