Finance

Home Affordability Calculator

Find out how much house you can afford based on income, debts, and the 28/36 DTI rule used by mortgage lenders.

Quick Answer

Using the 28/36 rule, your total housing costs should not exceed 28% of gross monthly income, and total debts should stay below 36%. On a $100K income with $500/mo in debts and a 6.5% interest rate, you can typically afford a home around $350,000-$380,000 with 20% down. Your specific number depends on taxes, insurance, and HOA fees.

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Disclaimer: This calculator provides estimates based on the 28/36 DTI rule and does not guarantee mortgage approval. Actual affordability depends on credit score, employment history, loan type (conventional, FHA, VA), PMI requirements, and lender-specific guidelines. Property taxes and insurance vary by location. Always get pre-approved by a lender for your specific situation. This tool is for educational purposes only and does not constitute financial advice.
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About This Tool

The Home Affordability Calculator uses the industry-standard 28/36 debt-to-income rule to estimate the maximum home price you can comfortably afford. It takes into account your household income, existing monthly debts, down payment savings, interest rate, loan term, property taxes, homeowner's insurance, and HOA fees to give you a realistic picture of your home buying power.

Unlike simple calculators that only look at income, this tool factors in the complete picture. Your existing debts (car payments, student loans, credit card minimums) directly reduce how much mortgage you can take on, because lenders evaluate your total debt-to-income ratio. The 28/36 rule means housing costs should stay under 28% of gross income and total debts under 36%.

Understanding DTI Ratios

Front-end DTI measures just your housing costs (mortgage, taxes, insurance, HOA) as a percentage of gross monthly income. Back-end DTI adds all other monthly debt obligations. While the 28/36 rule is the conservative guideline, some loan programs allow higher ratios. FHA loans may approve borrowers with back-end DTI up to 50%, and VA loans have no specific DTI limit (though most lenders cap at 41%). Conventional loans typically require back-end DTI under 43%.

Factors That Affect Your Budget

Property tax rates vary dramatically by location, from under 0.3% in Hawaii to over 2% in New Jersey and Illinois. Insurance costs depend on location, home age, and coverage level. HOA fees can add $200-$500+ per month in condos and planned communities. All of these non-mortgage costs reduce your buying power, which is why this calculator includes them. For a detailed mortgage payment breakdown, use our Mortgage Calculator.

Frequently Asked Questions

What is the 28/36 rule for home affordability?
The 28/36 rule is a guideline lenders use to assess mortgage affordability. The "28" means your total housing costs (mortgage payment, property tax, insurance, HOA) should not exceed 28% of your gross monthly income (front-end DTI). The "36" means your total debt payments (housing costs plus car loans, student loans, credit cards, etc.) should not exceed 36% of gross monthly income (back-end DTI). Some loan programs allow higher ratios, but 28/36 is considered the safe standard.
How much house can I afford on a $100K salary?
On a $100,000 salary with no other debts, the 28/36 rule allows approximately $2,333/month for housing costs. With a 6.5% rate, 30-year term, 20% down payment, and 1.1% property tax, you could afford a home around $350,000-$380,000. Your actual number depends on debts, down payment, interest rate, and local property taxes. Use this calculator with your specific numbers for an accurate estimate.
What is DTI and why does it matter?
DTI (Debt-to-Income ratio) compares your monthly debt payments to your gross monthly income. Front-end DTI includes only housing costs. Back-end DTI includes all debts. Lenders use DTI to determine how much mortgage you qualify for. Conventional loans typically require back-end DTI under 43%. FHA loans may allow up to 50% in some cases. A lower DTI means less financial stress and a better chance of loan approval at favorable rates.
How does my down payment affect affordability?
A larger down payment increases your buying power in two ways: it reduces the loan amount (lowering your monthly payment), and it may qualify you for better interest rates. Putting 20% down also eliminates Private Mortgage Insurance (PMI), which can save $100-$300/month. However, you do not necessarily need 20% down -- FHA loans require as little as 3.5%, and some conventional loans allow 3-5% down.
Should I choose a 15-year or 30-year mortgage?
A 30-year mortgage has lower monthly payments, which means you can afford a higher-priced home. A 15-year mortgage has higher payments but saves significantly on total interest -- often hundreds of thousands of dollars. For example, a $300,000 loan at 6.5% costs $1,896/month over 30 years ($382,633 total interest) vs $2,613/month over 15 years ($170,272 total interest). Choose 30-year for maximum buying power and flexibility, or 15-year if you can afford the higher payments and want to build equity faster.

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