Home Affordability Calculator — How Much House Can I Afford?
Enter your gross monthly income, existing debts, down payment and interest rate to find the maximum home price you can finance under standard lender guidelines.
%
years
% / year
% / year
Based on the 28/36 rule: housing ≤ 28% and all debts ≤ 36% of gross monthly income
1,960
per monthPrincipal & interest
79.8%
Property tax
13.9%
Insurance
6.3%
- 1
Front-end limit (28% of income)
7,000 × 28% = 1,960 - 2
Back-end limit (36% − existing debts)
7,000 × 36% − 500 = 2,020 - 3
Max monthly PITI
min(1,960, 2,020) = 1,960The binding constraint from the 28/36 rule. - 4
Maximum home price
(1,960 + 50,000 × 0.006321) ÷ (0.006321 + 0.0013333) = 297,365Back-solves the amortisation equation for the home price given the PITI cap, down payment and PI factor.
How does this calculator work?
Under the 28/36 rule, your maximum monthly housing cost is 28% of gross income — capped so total debts stay under 36%. Back-solving the amortisation formula gives the maximum home price you can afford. Property tax (≈ 1.1% US avg, 2024) and insurance rates are editable estimates — adjust them for your location.
Formula
How this is calculated
Most conventional lenders in the US apply the 28/36 rule to qualify buyers. The front-end limit requires that your total monthly housing cost — principal, interest, property tax, and homeowner's insurance (PITI) — does not exceed 28% of gross monthly income. The back-end limit requires that all monthly debt obligations (PITI plus car loans, student loans, credit cards, and other recurring debts) do not exceed 36% of gross income. FHA loans allow up to 43% back-end DTI, but this calculator uses the stricter conventional 28/36 threshold.
Given the maximum allowable monthly PITI, the calculator back-solves for the home price. Because property tax and insurance are percentages of the home's value, this is a linear equation: maxPITI = (homePrice − downPayment) × piFactor + homePrice × monthlyTIrate, where piFactor is the amortisation rate factor r(1+r)ⁿ / ((1+r)ⁿ − 1) for your loan rate r and term n months. Solving gives homePrice = (maxPITI + down × piFactor) ÷ (piFactor + monthlyTIrate).
Tax and insurance rates are editable estimates — the US average property tax was approximately 1.1% in 2024, and homeowner insurance typically runs 0.3–0.8% of home value per year. Rates vary significantly by state and county. The result excludes PMI (required if down payment is below 20%, typically 0.5–1.5% of the loan per year), HOA dues, and maintenance costs. Actual lender qualification may differ.
Frequently asked questions
The 28/36 rule is a standard lender guideline: your monthly housing costs (PITI — principal, interest, taxes and insurance) should not exceed 28% of gross monthly income (the front-end ratio), and all monthly debts combined should not exceed 36% (the back-end ratio). Staying within both ratios makes you a low-risk borrower for conventional mortgages.
No. If your down payment is less than 20% of the purchase price, lenders typically require PMI at roughly 0.5–1.5% of the loan amount per year (about $83–$250/month on a $200,000 loan). Add your estimated PMI to the monthly total for a more accurate picture.
You can raise it by increasing your income, paying down existing debts, saving a larger down payment, or qualifying for a lower interest rate. A 1% rate reduction on a $300,000 30-year loan saves roughly $175 per month and translates to roughly $30,000 more purchasing power.
Also known as
TG we-Calculate Editorial Team. (2026). Home Affordability Calculator — How Much House Can I Afford? [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/home-affordability-calculator
TG we-Calculate Editorial Team. "Home Affordability Calculator — How Much House Can I Afford?." TG we-Calculate. 2026. https://we-calculate.com/calculator/home-affordability-calculator.
TG we-Calculate Editorial Team, "Home Affordability Calculator — How Much House Can I Afford?," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/home-affordability-calculator
@misc{wecalculate_home_affordability_calculator, title = {Home Affordability Calculator — How Much House Can I Afford?}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/home-affordability-calculator}}, year = {2026}, note = {TG we-Calculate} }
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