Home Affordability Calculator
Enter your income, monthly debts, down payment, interest rate, property tax, insurance and HOA dues. The calculator applies the 28/36 guideline to estimate the maximum home price, the loan and the monthly payment.
Last updated November 4, 2026
Before taxes. Example value.
Car, student loan and card minimums. Not rent or the new housing payment.
Example rate, not a current offer.
Guideline 28.
Guideline 36.
Result
$420,622.23
| Result | Amount |
|---|---|
| Maximum home price | $420,622.23 |
| Loan amount | $360,622.23 |
| Down payment | $60,000.00 |
| Principal and interest | $2,279.38 |
| Property tax | $420.62 |
| Insurance | $100.00 |
| HOA | $0.00 |
| Total monthly housing | $2,800.00 |
| Limit that applies | Front-end |
The front-end limit (28%) sets the payment. The 28/36 rule is a guideline, not a rule of law. Lenders and loan programs set their own limits, and PMI and closing costs are not included.
Show the work
Formula: housing limit = min(income × front %, income × back % - debts); loan = (budget - t × down) ÷ (k + t); price = loan + down
- Gross monthly income: $120,000.00 ÷ 12 = $10,000.00.
- Front-end limit: $10,000.00 × 28% = $2,800.00. Back-end limit: $10,000.00 × 36% - $500.00 = $3,100.00.
- Maximum housing payment: the lower of the two = $2,800.00.
- Left for principal, interest and tax: $2,800.00 - $100.00 insurance - $0.00 HOA = $2,700.00.
- Payment per $1 borrowed k = 0.0063207 (6.5% over 360 months); monthly tax rate t = 1.2% ÷ 12 = 0.10000% of the price.
- Loan = ($2,700.00 - t × $60,000.00) ÷ (k + t) = $360,622.23; price = $360,622.23 + $60,000.00 = $420,622.23.
- Check: $2,279.38 + $420.62 tax + $100.00 insurance + $0.00 HOA = $2,800.00.
Result: Estimated maximum home price $420,622.23 with a loan of $360,622.23 and $60,000.00 down. Housing payment $2,800.00/month. The front-end limit (28%) sets the payment. Guideline only; lenders differ.
How home affordability is calculated
housing limit = min(income × front %, income × back % - debts)
loan = (budget - t × down) ÷ (k + t)
price = loan + down
The 28/36 rule is a lender guideline built on two ratios. The front-end ratio compares your housing payment with gross monthly income, and the guideline is 28%. The back-end ratio compares your housing payment plus other monthly debts with gross monthly income, and the guideline is 36%. It is a rule of thumb, not a rule of law, so you can change both percents.
The calculator finds the largest housing payment that satisfies both. The front limit is gross monthly income times the front percent. The back limit is gross monthly income times the back percent, minus your monthly debts. The smaller of the two is your maximum housing payment, and the result tells you which one applies.
From that payment it subtracts monthly insurance and HOA dues. What remains must cover principal, interest and property tax. Tax depends on the price, so the calculator solves for it directly. With k as the monthly payment per $1 borrowed (from the standard loan formula, or 1 divided by the months at 0%) and t as the monthly tax rate, the budget B equals loan × k + t × (loan + down payment). Solving gives loan = (B - t × down payment) ÷ (k + t), and the price is the loan plus the down payment.
See how we calculate for the formulas, sources and review schedule behind every calculator.
Also useful alongside this calculator: Car Payment Calculator, Mortgage Payoff Calculator and VA Loan Calculator.
Front-end versus back-end ratio
With few other debts, the front-end limit is usually the tighter one. With larger car or student loan payments, the back-end limit takes over because debts are subtracted from the budget first. The result and the Show the work steps both name the limit that applies.
Monthly debts should include minimum payments on cards, car loans, student loans and similar obligations. Do not include rent you will stop paying or the new housing payment, which the calculator adds itself.
What the estimate leaves out
Lenders and loan programs, including FHA and conventional limits, use their own ratios, credit rules and reserves, and some allow higher ratios than 28/36. This calculator does not include PMI, closing costs, maintenance or moving costs, so a lower down payment may raise your real payment. Use the Down Payment Calculator to see PMI and the Closing Cost Calculator for cash needed at closing.
The maximum price is a ceiling, not a recommendation. Staying below it leaves room for repairs, savings and changes in income. A pre-approval from a lender is the only way to know what you can actually borrow.
General information, not financial advice
This calculator gives a general estimate from the numbers you enter. It is not financial or tax advice, and your actual results can differ. Check important decisions with a qualified professional or the official source.
Sources
Official and primary sources for the statements on this page. Their authors have not reviewed or endorsed this page.
- Consumer Financial Protection Bureau, What is a debt-to-income ratio?. Defines debt-to-income ratio as monthly debt payments divided by gross monthly income, shows a worked example, and says lenders and loan products set different limits.
- Consumer Financial Protection Bureau, How can I figure out if I can afford to buy a home and take out a mortgage?. Advises choosing a mortgage that is affordable for you rather than the most you qualify for, and counting homeowner insurance, property taxes, possible mortgage insurance, HOA fees and upkeep in monthly costs.
Official information: both CFPB pages were opened and read on 2026-11-04. They back the debt-to-income definition, the point that lenders set different limits and the list of monthly home costs. Neither page mentions the 28/36 guideline, front-end and back-end ratios or any percentage limit.
Calculator method: the housing limit is the lower of income × front-end percent and income × back-end percent minus other debts. The loan is found by inverting the standard amortization formula with property tax as a percent of price. These are our calculations.
Assumptions and estimates: the 28/36 rule is a common lender rule of thumb that is not sourced here, and it is not a law or a CFPB requirement. The income, debts, rate, tax and insurance values are example inputs. PMI, closing costs and maintenance are not included. This is an estimate, not a pre-approval or loan quote.
How to use the Home Affordability Calculator
- Enter your gross annual income and your total monthly debt payments.
- Add your down payment, an example interest rate and the loan term.
- Enter property tax as a percent of price, yearly insurance and monthly HOA dues.
- Keep the 28 and 36 limits or change them, then read the maximum price and payment.
- Open Show the work to follow each step, or use Copy, Print or Share.
Worked example
Example inputs, not current rates: $120,000 income ($10,000 a month), $500 monthly debts, $60,000 down, 1.2% property tax, $1,200 yearly insurance, no HOA, 30 years, 28% and 36% limits. The front limit is $2,800 and the back limit is $3,100, so the front limit applies.
| Rate | Loan | Maximum price | Principal and interest | Property tax | Total housing |
|---|---|---|---|---|---|
| 5.5% | $395,334.45 | $455,334.45 | $2,244.67 | $455.33 | $2,800.00 |
| 6.5% | $360,622.23 | $420,622.23 | $2,279.38 | $420.62 | $2,800.00 |
| 7.5% | $330,324.33 | $390,324.33 | $2,309.68 | $390.32 | $2,800.00 |
Frequently asked questions
What is the 28/36 rule?
It is a guideline that housing costs should be at most 28% of gross monthly income and total debts at most 36%. It is not a law, and lenders set their own limits.
Does this tell me what a lender will approve?
No. Lenders also look at credit, reserves, loan type and other factors, and FHA or conventional rules can differ. Only a pre-approval shows what you can borrow.
Why does a higher interest rate lower the price?
The payment limit stays the same, but more of each payment goes to interest, so a smaller loan fits inside it. The table above shows the effect.
Are PMI and closing costs included?
No. This estimate covers principal, interest, property tax, insurance and HOA. PMI, closing costs and maintenance would lower what is comfortable to spend.