Mortgage Affordability Calculator
Estimate the maximum home price you can afford given your annual income, existing monthly debt payments, down payment, and mortgage rate, applying the traditional 28/36 debt-to-income rule to a 30-year fixed loan. Use it as a starting point before getting pre-approved by a lender.
Last updated: September 2026
Formula below · 3 sources (CFPB, hud.gov, Wikipedia) · Updated Sep 2026
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About this calculator
The calculator applies the classic 28/36 qualifying rule. The monthly housing payment may be at most 28% of gross monthly income (the front-end ratio), and the housing payment plus your other monthly debt payments may be at most 36% of gross monthly income (the back-end ratio); the lower of the two limits wins. It then back-calculates the largest 30-year fixed loan that payment supports at the interest rate you enter (6.5% if you leave it blank) and adds your down payment to give the maximum home price. Mathematically: max payment = min(income ÷ 12 × 0.28, income ÷ 12 × 0.36 − monthly debts); max loan = max payment × [1 − (1 + r)^−360] ÷ r, where r is the annual rate ÷ 12; max home price = max loan + down payment. With low other debts the 28% front-end limit binds; once other debts exceed 8% of gross income, the 36% back-end limit binds and every extra dollar of debt payment removes a dollar of housing budget. The rate matters a great deal: each $1 of monthly payment supports about $158 of loan at 6.5% but about $223 at 3.5%, so the same income buys roughly 40% more loan at 3.5%. Edge cases: if your other debts already use 36% or more of gross income, the affordable loan is zero and the result equals your down payment; a 0% rate is handled as payment × 360. Important: the whole qualifying payment is treated as principal and interest. Property taxes, homeowner's insurance, PMI (if you put down less than 20%) and HOA dues also count toward the 28%, so subtract their monthly total from the budget, or treat the result as an upper bound. Closing costs are not included either. Use the output as a planning ceiling, not a target.
How to use
Example 1 — Single income, modest debt. Annual income of $90,000, monthly car and student loan payments totaling $500, a $40,000 down payment, and a 6.5% rate. Enter 90000 for Annual Income, 500 for Monthly Debts, 40000 for Down Payment, and 6.5 for the rate. Result: about $372,243. Verify: gross monthly income = $7,500; 28% = $2,100; 36% − $500 = $2,200; the lower limit is $2,100. At 6.5% over 30 years, $1 of monthly payment supports about $158.21 of loan, so 2,100 × 158.21 ≈ $332,243 of loan, plus $40,000 down ≈ $372,243. ✓ Example 2 — Heavier debts. Same $90,000 income and $40,000 down, but $1,200 a month of other debt payments. Enter 90000, 1200, 40000, and 6.5. Result: about $277,316. Verify: 36% of $7,500 = $2,700, minus $1,200 = $1,500, which is now below the 28% limit of $2,100, so the back-end ratio binds; 1,500 × 158.21 ≈ $237,316 of loan plus $40,000 ≈ $277,316. ✓ Example 3 — Dual-income household. Joint annual income $180,000, monthly debts $850, down payment $80,000, rate 6.5%. Result: about $744,485 (28% of $15,000 = $4,200 binds; 4,200 × 158.21 ≈ $664,485 loan). At 3.5% the same payment would support about $935,000 of loan, which shows how strongly rates drive affordability.
Frequently asked questions
What is the 28/36 rule and how does this calculator use it?
The 28/36 rule is a longstanding mortgage-qualification heuristic: housing costs (PITI) should not exceed 28% of gross monthly income (the front-end ratio), and total monthly debt service including the mortgage should not exceed 36% of gross monthly income (the back-end ratio). FHA loans historically used 31/43; the federal qualified-mortgage rule caps back-end DTI at 43%. This calculator applies both limits and uses whichever allows the smaller payment, which leaves room for utilities, maintenance, and unexpected costs. Lenders today often allow higher ratios for borrowers with strong credit and substantial reserves, but the 28/36 guideline aligns with what most personal-finance planners recommend for long-term financial stability. Even if your lender approves you for more, the 28/36 limits are a safer target — qualifying for a payment and being able to comfortably afford it are different questions.
What interest rate should I enter?
Enter the rate you are actually being quoted for a 30-year fixed mortgage; if you leave the field blank the calculator uses 6.5%. The rate has a large effect: at 6.5% each $1 of monthly payment supports about $158 of loan, at 5.5% about $176, and at 3.5% about $223, so dropping from 6.5% to 3.5% raises the affordable loan by roughly 40%. Rates move daily and depend on your credit score, down payment and points, so run two or three rates to see the range, and get pre-approved for an exact figure.
What costs are not included in this calculation?
Several material costs are missing. Property taxes (0.5–4% of home value annually depending on location) and homeowner's insurance ($1,000–$3,000+ per year) are typically required and added to your monthly PITI payment via escrow. PMI (private mortgage insurance) is required for any down payment under 20% and typically costs 0.5–1.5% of the loan amount annually. HOA fees, condo dues, and special assessments are not captured. Closing costs (typically 2–5% of the loan amount) are due upfront. Ongoing maintenance and repairs rule-of-thumb is 1–2% of home value per year. Furnishings, moving costs, and the inevitable wave of post-purchase repairs add several thousand more. A realistic affordability picture might be 70–80% of what this calculator returns once all those layered costs are folded in.
What are the most common mistakes people make in estimating mortgage affordability?
The biggest is treating the lender's approval as a target — banks may approve up to 43% back-end DTI, but living at that ratio leaves no buffer and is a major contributor to financial stress and foreclosure risk. The second is forgetting non-mortgage housing costs (taxes, insurance, HOA, maintenance, utilities); the all-in cost of owning a home is typically 30–50% above the principal-and-interest figure alone. The third is overlooking that low down payments trigger PMI, adding $100–$300+ per month for years. The fourth is buying at the top of a personal budget and finding yourself unable to weather a job loss, medical emergency, or major repair. The fifth is comparing rent to mortgage payment without accounting for property tax, maintenance, and the opportunity cost of the down payment; the rent-vs-buy decision is more complex than a payment comparison. Finally, people often assume their income will rise — basing the budget on optimistic future income rather than current take-home is a recipe for being house-poor.
When should I not use this calculator?
Always enter a current quoted rate rather than relying on the 6.5% default. It is the wrong tool for adjustable-rate mortgages where the rate resets, for interest-only loans, or for non-standard mortgages (balloon, reverse) that don't follow standard 30-year amortization. Do not use it as your only affordability check — get pre-approved by an actual lender who pulls your credit and uses current rates, and run a separate household-budget model that includes all the costs this calculator omits. For very high-DTI borrowers, jumbo-loan markets, government-backed loans (FHA, VA, USDA), or first-time buyer programs with different qualification rules, lender-specific calculators give more accurate ceilings. And do not use the maximum as your target — buying significantly below the calculated maximum leaves room for retirement saving, emergencies, and life flexibility.