About the Home Affordability Calculator
Lenders decide how much house you can afford mainly with two debt-to-income (DTI) ratios. The classic 28/36 rule says your housing payment โ principal, interest, property tax, homeowners insurance and HOA dues (PITI) โ should stay under 28% of gross monthly income, and all debt payments together under 36%. This calculator works backward from those limits to the largest mortgage and home price that fit, including property tax and insurance that scale with the price.
How to use
- Enter your gross annual income and the total of your monthly debt payments (car, student loans, credit card minimums โ not rent or utilities).
- Enter your down payment and the DTI limits: 28% front-end and 36% back-end by default.
- Enter the expected interest rate and term, plus your countyโs property tax rate, home insurance and any HOA dues.
- Read the maximum home price and see which limit applies; the table shows how affordability changes with rates.
The 28/36 rule, step by step
With $100,000 gross income, monthly income is $8,333. The front-end limit is 28% = $2,333 for housing; the back-end limit is 36% = $3,000 minus $500 of other debts = $2,500. The lower one, $2,333, is the housing budget.
With $60,000 down, a 6.5% 30-year loan, 1.1% property tax and $1,800 a year for insurance, the budget covers a loan of about $294,076 โ principal and interest $1,858.76, property tax $324.57 and insurance $150 โ so you can afford a home of about $354,076. Total DTI is 34%.
DTI limits by loan type
| Loan | Typical max DTI |
|---|---|
| Conventional (Fannie Mae / Freddie Mac) | 36% manually underwritten, up to 45โ50% with automated approval and strong credit |
| FHA | 31% housing / 43% total, higher with compensating factors |
| VA | 41% guideline plus residual-income test |
| USDA | 29% housing / 41% total |
Being approved for a higher DTI doesnโt mean it fits your budget โ 28/36 leaves room for savings and repairs.
Costs this estimate leaves out
- PMI: with less than 20% down, conventional loans add private mortgage insurance, often about 0.3โ1.5% of the loan per year.
- Closing costs: typically 2โ5% of the price, paid in cash in addition to the down payment.
- Maintenance: plan for around 1% of the homeโs value per year.
FAQ
How much house can I afford on a $100,000 salary?
With $500 of other monthly debts, $60,000 down and a 6.5% 30-year mortgage, about $354,000 under the 28/36 rule (including 1.1% property tax and $1,800 insurance). Lower rates, a bigger down payment or fewer debts raise that figure.
Is the 28/36 rule based on gross or net income?
Gross (pre-tax) income โ thatโs what lenders use. If your take-home pay is low because of high taxes or retirement contributions, consider a lower ratio.
What counts as monthly debt?
Minimum payments on car loans, student loans, credit cards, personal loans, child support and alimony. Rent (which the mortgage replaces), utilities, phone and insurance premiums are not counted.
Why does the 28% rule limit me and not the 36%?
If you have few other debts, the housing limit is the tighter one. Once other debts exceed 8% of income, the 36% total limit becomes the binding constraint.