Find your maximum home purchase price based on income, monthly debts, and down payment. Uses lender-standard 28%/36% DTI rules used across the United States.
28%/36% DTI rules — how much home can you afford?
The house affordability calculator uses the same guidelines US mortgage lenders apply when reviewing loan applications. The 28% front-end rule says your total monthly housing cost — principal, interest, property taxes, and insurance — should not exceed 28% of your gross monthly income. On a $75,000 annual salary ($6,250/month), that's $1,750 for housing. The 36% back-end rule says all monthly debt payments combined — housing plus car loans, student debt, credit cards — should stay under 36% of gross income. These aren't hard ceilings for every lender, but they're the conventional guidelines that Fannie Mae and Freddie Mac use to define "qualified" borrowers.
Down payment size has an outsized effect on how much home you can afford — and what you pay every month. A 20% down payment eliminates PMI, which can run $100–$250 per month on a $300,000 home, and reduces the loan balance enough to noticeably lower the payment. Putting down 10% instead saves cash upfront but adds PMI and a higher monthly payment that reduces your qualifying price. First-time buyers in many states can access down payment assistance programs through state housing agencies — California, Texas, Florida, and New York all have active programs worth researching before you shop.
Monthly PITI (principal, interest, taxes, insurance) should stay under 28% of gross monthly income. At $80,000/year, that's roughly $1,867/month for housing — including taxes and insurance, not just the loan payment.
All monthly debts combined shouldn't exceed 36% of gross income. With a $500 car payment and $200 in student loans, a $6,000/month earner has only $1,460 remaining for housing under the 36% ceiling.
Every extra $10,000 in down payment reduces the loan by $10,000 and saves roughly $65/month on a 30-year loan at 6.5%. Getting to 20% down also eliminates PMI, adding $100–$250/month back to your budget.
Budget for maintenance (1%–2% of home value annually), HOA fees if applicable, utilities, and home insurance. A $400,000 home can easily cost $4,000–$8,000/year in maintenance alone — factor this into your affordability math.
Affordability runs the mortgage calculation backwards: instead of asking what a given loan costs, it asks what payment your income supports and what loan that payment services. Two constraints bind, and the lower one wins. The 28/36 rule caps housing at 28% of gross income and total debt at 36%, so existing car and student loan payments directly reduce the house you can buy. The result is also highly rate-sensitive: because the payment is fixed by your income, a higher rate buys strictly less principal, which is why affordability falls sharply when rates rise even though incomes have not changed.
Max housing payment = Gross monthly income × 28%Max total debt = Gross monthly income × 36%, less existing debtsMax loan = PI available × [ (1 + i)^n − 1 ] ÷ [ i(1 + i)^n ]where:
Assumptions: Guideline ratios, not hard rules; lenders vary and automated underwriting stretches further with strong credit and reserves. Says nothing about what is comfortable — it is a lending limit, not a budget.
Gross income of $10,000 a month, a $600 car payment, $60,000 saved for a down payment, and a 30-year loan at 6.5%.
ResultAbout $400,000 — a $340,153 loan on a $2,800 housing budget
Clearing the $600 car payment would not raise this number, because the 28% front-end cap is already the binding constraint. But a rate move to 7.5% cuts the supportable loan to roughly $307,488 — the same income buying $32,665 less house.