Mortgage Affordability Calculator (US, 28/36 Rule)
Estimate the most you could pay for a home using the 28/36 guideline: housing costs up to 28% of gross monthly income, and all debts up to 36%.
How affordability is estimated: housing budget = the lower of 28% of gross monthly income and 36% of income minus other debts. Subtract tax and insurance, work out the loan that payment supports, then add your down payment.
Example: $100,000 a year, $500 of other debts, $40,000 down, $400 of tax and insurance and an illustrative 6.5% 30-year rate support a loan of about $305,874 and a home of about $345,874.
Step-by-step in how much house can I afford; check your DTI with the debt-to-income calculator; price a home with the mortgage calculator.
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Use your actual figures where available. The output is an educational estimate based on the assumptions below.
Displayed amounts are rounded to two decimal places. Keep the same currency and time period across related inputs.
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How the 28/36 rule works
Lenders compare your monthly debt payments with your gross monthly income, the debt-to-income (DTI) ratio. A long-standing rule of thumb is that housing costs (principal, interest, property tax and insurance) should not exceed about 28% of gross income, and all debts including housing should not exceed about 36%. These are guidelines, not legal limits; many loan programmes allow higher ratios, and a lender may approve less than this calculator shows.
Max loan = PV of (housing budget − tax & insurance) at your rate and term
Max price = max loan + down payment
Worked example: $100,000 income, $40,000 down
With $100,000 of gross income ($8,333.33 a month), $500 of other monthly debts, a $40,000 down payment, an illustrative 6.5% rate over 30 years and $400 a month of tax and insurance: the 28% limit is $2,333.33 and the 36% limit is $3,000 − $500 = $2,500, so the 28% front-end limit applies. That leaves $1,933.33 for principal and interest, which supports a loan of about $305,874.25 and a maximum price of about $345,874.25. The 6.5% rate is an example, not a current market rate.
What the estimate leaves out
- Closing costs, moving costs and an emergency fund, which all come out of cash you might otherwise put down.
- Private mortgage insurance (PMI) when the down payment is under 20%, unless you add it to tax & insurance.
- Credit score, which changes the rate you are offered and therefore the loan you can support.
Sources
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Frequently asked questions
Is the 28/36 rule a legal requirement?
No. It is a common lender guideline. Lenders and loan programmes set their own debt-to-income limits, and some allow higher ratios.
Which income should I use?
Gross income before tax, usually for everyone on the mortgage application.
Why does a higher rate lower the price I can afford?
The same monthly budget supports a smaller loan when more of each payment goes to interest.
Does this include PMI or HOA fees?
Only if you add them to the monthly property tax and insurance field.
How much house can I afford with a $100,000 salary?
Under the 28/36 guideline, with $500 of other monthly debts, a $40,000 down payment, $400 a month of tax and insurance and an illustrative 6.5% 30-year rate, about $345,874. A different rate or debt level changes the answer.
Is the 28/36 rule a lending requirement?
No. It is a long-standing rule of thumb. Many loan programmes allow higher ratios, and a lender may approve less than this estimate.
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