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Finance

How Much House Can I Afford?

Get the maximum home price your income can support using the 28/36 DTI rule with property tax, insurance and HOA.

How Much House Can I Afford?

Pre-tax salary plus consistent bonuses or commissions.

Car loans, student loans, minimum credit card payments. Skip rent.

Maximum home price

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Enter income and rate to compute the max.

What is the 28/36 rule?

The 28/36 rule is the default qualification heuristic for US conventional mortgages. The front-end ratio says housing payments (PITI — principal, interest, taxes, insurance plus HOA) should not exceed 28% of gross monthly income. The back-end ratio says total monthly debt (housing plus car, student loans and credit cards) should not exceed 36%. Lenders technically allow up to 43% back-end and FHA loans go higher, but those numbers are stretch goals — staying near 28/36 leaves cushion for emergencies, retirement contributions and the lifestyle creep that ruins household budgets. This calculator backs out the maximum home price by assuming you push to the 28% line and walking the math backwards through your mortgage rate.

How to use the calculator

  1. Enter your gross annual income from W-2 line 1, including stable bonus income.
  2. Add up your other monthly debts: car payment, student loans, credit card minimums.
  3. Enter the down payment you have ready in cash.
  4. Use a current mortgage rate (Mortgage News Daily or Freddie Mac) and a 30-year term.
  5. The defaults for tax (1.2%), insurance ($1,200/yr) and HOA ($0) are reasonable for most US markets — adjust for your area.

How the math works

Max housing payment = MIN(28% of gross/12, 36% of gross/12 minus existing debt). Max home price is then solved by backing out the mortgage formula given the rate, term, tax % and insurance.

Max Housing = MIN(Gross/12 × 0.28, Gross/12 × 0.36 − Debt)

Mortgage Principal = solve P from Payment using standard amortization

Typical max home price by income

At 6.5% rate, 10% down, 1.2% tax — numbers shift with rates.

Gross income Max home Max payment
$60,000~$200K~$1,400
$80,000~$270K~$1,866
$120,000~$405K~$2,800
$200,000~$675K~$4,666

Assumes no other debt and 28% front-end DTI.

Frequently asked questions

Is 28% really my limit?
It’s the conservative rule. Lenders frequently approve up to 36–43% back-end ratio, but you’ll be house-poor at those levels.
Why does my pre-approval show more?
Lenders use back-end DTI up to 43% (or higher for FHA). That maximises commission for them but leaves you with no margin for emergencies.
Should I include my partner’s income?
Yes, if both are on the loan. Combine gross incomes and combine all monthly debts.
Does down payment really matter that much?
It directly reduces the loan, but more importantly above 20% you avoid PMI — about 0.5–1% of the loan per year extra.
What about my emergency fund?
Don’t empty it for the down payment. Keep at least 3–6 months of expenses liquid after closing.
Why do property taxes vary so much?
By state. New Jersey is ~2.4%, California is capped at 1% by Prop 13, Texas is around 1.8%. Use 1.2% as a national average and check your county.
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