How much house can I afford? The 28/36 rule
Before you fall for a listing, it helps to know your ceiling. Lenders set it with two simple ratios — and your real comfort level is usually a bit below what they’ll approve.
The 28/36 rule
- 28% front-end — your housing payment should stay under 28% of gross monthly income.
- 36% back-end — all debt payments (housing + cars + cards + loans) under 36%.
Lenders use the lower of the two limits. The Home Affordability calculator takes your income, debts, down payment and rate and works backward to a maximum price.
What the rule leaves out
Approval isn’t affordability. Property tax, insurance, HOA, maintenance (~1%/yr) and PMI (if you put under 20% down) all stack on top of principal & interest. Many buyers deliberately target a payment below the 28% cap to keep breathing room.
Your down payment raises the price you can afford almost one-for-one — and crossing 20% removes PMI. See the Down Payment calculator.
Frequently asked questions
- What is debt-to-income (DTI)?
- DTI is your monthly debt payments divided by gross monthly income. Most lenders want total DTI at or below 36–43%; this calculator uses the conservative 36% back-end limit.
- Does the calculator include taxes and insurance?
- It’s based on principal & interest, so treat the result as an upper bound — property tax, insurance, HOA and PMI all reduce what you can comfortably afford.
- How much should I put down?
- 20% avoids PMI and lowers your payment, but many loan programs allow 3–10%. A larger down payment directly increases the price you can afford.
Run your own numbers
Put this guide into practice — these calculators run free in your browser.