How much house can I afford?
An affordability calculator that applies the 28/36 DTI rule (housing ≤ 28% of gross income, total debt ≤ 36%) and previews your real all-in monthly payment with taxes, insurance, and PMI.
The 28/36 rule
Lenders and financial planners converged on the 28/36 rule decades ago:
- Front-end ratio (28%): housing payment (mortgage + property tax + insurance + HOA) should not exceed 28% of your gross monthly income.
- Back-end ratio (36%): total debt payments (housing + car + student + credit card minimums) should not exceed 36% of gross monthly income.
The lower of those two ceilings sets your real maximum monthly housing payment. Banks will approve you for more (FHA commonly goes to 31/43; conventional loans through automated underwriting allow up to 50% total DTI) but those approvals are the floor of "stretched and stressed," not the ceiling of "comfortable."
Your cash caps the answer too. Conventional loans need at least 3% down, so we never show a price your cash can't cover at 3%. Below 20% down, PMI is added to the monthly payment, which pulls the max price down. Closing costs (typically 2–5% of the price) and an emergency reserve should come from cash on top of what you enter here.
Once you know your price range, run the rent vs buy calculator to see whether buying actually beats renting at that price point. If you'd need to use savings earmarked for debt payoff, check the debt vs invest calculator first.
Common questions
What is the 28/36 rule?
The 28/36 rule says your housing payment should not exceed 28% of gross monthly income (front-end), and total debt payments should not exceed 36% (back-end). Banks will approve more, but 28/36 is the comfort ceiling.
Does PMI affect how much I can afford?
Yes. If your down payment is under 20%, PMI adds 0.5-1% of the loan annually to your monthly payment, which reduces the max price the 28% rule allows. This calculator includes PMI automatically when your down payment triggers it.
Why is the bank pre-approval higher than this calculator's number?
Banks approve based on looser ratios: FHA commonly goes to 31/43, and conventional loans run through automated underwriting can go up to a 50% total debt-to-income ratio. Those approvals mark the floor of 'stretched,' not the ceiling of 'comfortable.' This calculator uses the conservative 28/36 rule.