How much house can you afford?
Lenders size a mortgage against your income and your other debts. This calculator applies the standard 28% and 36% guidelines, adds estimated taxes and insurance, and works backwards to a maximum price with the full monthly breakdown.
Your price range
The 28/36 lender guidelines, worked backwards from income to a price.
The 28% and 36% rules
Lenders judge a mortgage application with two ratios. The front-end ratio compares housing costs — principal, interest, property tax, and insurance — with gross monthly income, and the traditional ceiling is 28%. The back-end ratio adds every recurring debt payment on top of housing and compares the total with income, with a traditional ceiling of 36%. This calculator gives you the smaller of the two budgets, estimates the tax and insurance share, and solves backwards for the largest price whose loan fits what is left. The ratios are underwriting conventions, not laws: lenders regularly approve above them with strong credit and reserves, and deny below them for other reasons.
On a $100,000 income with $400 of monthly debts, a $60,000 down payment, and a 6.5% rate over 30 years, the 28% rule allows $2,333 a month for housing. After estimated taxes ($330) and insurance ($105), the remainder supports a $300,283 loan — a maximum price of about $360,283, with a principal-and-interest payment of $1,898.
What is inside the monthly number
The payment a lender qualifies you on is not just the loan. Property tax is estimated here at 1.1% of the price per year and homeowner’s insurance at 0.35%, both divided monthly. Those are national midpoints; actual property tax runs from under 0.3% in some states to over 2% in others, and it is charged on the full price, not the loan — so in a high-tax county the same income supports a noticeably lower price. If you know your local tax rate, expect roughly this effect: each extra 0.5% of annual tax removes about 5–6% from the affordable price at typical rates.
What the maximum leaves out
The maximum is a ceiling built from lender math, and lender math ignores several real costs. Mortgage insurance applies when the down payment is under 20% and is not charged here. HOA dues count as housing costs for lenders but vary too much to estimate. Closing costs (often 2–5% of the price) come out of cash, not the loan. And maintenance — budget roughly 1% of the price per year — is entirely the owner’s problem. A household that buys at the maximum with nothing left over has qualified for the loan and disqualified itself from sleeping well.
Run the calculator again with the rate two points higher and the income one earner lower. A price that still fits under those assumptions is a price you can keep through a rate shock or a job change.
Frequently asked questions
Where do the 28% and 36% rules come from?
They are long-standing mortgage underwriting guidelines: housing costs should stay near or below 28% of gross monthly income, and all recurring debt payments — housing included — near or below 36%. They are lender conventions, not laws, and individual lenders approve ratios above and below them.
How are property tax and insurance estimated?
At 1.1% and 0.35% of the home price per year, divided monthly — reasonable national midpoints. Real property tax ranges from under 0.3% to over 2% depending on the state and county, so replace the estimate with local figures when you have them; the affordable price falls as those costs rise.
Does a larger down payment raise the affordable price?
Yes. Every extra dollar of down payment is a dollar not borrowed, so the same monthly budget supports a higher price. Reaching 20% down also usually removes private mortgage insurance, which this calculator does not charge — another reason the estimate is a ceiling, not a target.
Which debts count toward the 36% limit?
Recurring minimum payments: car loans, credit card minimums, student loans, personal loans, and support obligations. Lenders do not count utilities, groceries, insurance premiums, or subscriptions, even though your real budget has to.
Should I buy at the maximum the calculator allows?
Treat the result as the edge of lender comfort, not a recommendation. It excludes maintenance, HOA dues, closing costs, and any cushion for a rate change or a lost income month. Most households are better served buying below the maximum and keeping the difference invested or in reserve.