How Much House Can I Afford?
Use the proven 28/36 rule to translate your income, monthly debt, and down payment into a realistic home-price budget — including property tax, insurance, and PMI.
How much house can you really afford?
Banks want to know one thing above all else: can you make the payment every month? The industry-standard answer is the 28/36 rule — a debt-to-income (DTI) ratio test that has guided mortgage underwriting for decades.
The 28/36 rule, plain English
Your total housing cost (principal, interest, taxes, insurance, plus HOA) should stay below 28% of your gross monthly income. Your total debt payments, including that housing cost plus car loans, credit cards, and student loans, should stay below 36%.
What this calculator does
We take your housing budget and solve the PITI equation backwards: for a given monthly payment, what home price at your down payment and rate ends up at that payment? We show three scenarios — conservative (25%), recommended (28%), and aggressive (32%) — so you can choose your comfort zone.
Why rate matters more than you think
Every 1 percentage-point change in the mortgage rate changes your borrowing power by roughly 10%. If rates drop from 7.5% to 6.5% between your shopping window, the same $2,100 monthly payment buys you about $30,000 more home.
A healthy rule of thumb
- Keep PITI + HOA under 28% of gross monthly income
- Keep total debt (housing + car + cards + student loans) under 36%
- Hold 3–6 months of PITI in a liquid emergency fund before buying
- Don’t let a lender talk you into the maximum you qualify for
Frequently asked questions
How much house can I afford on my salary?
A quick rule of thumb is 3 to 5 times your gross annual income, but the 28/36 rule is more accurate: housing costs under 28% of gross monthly income, total debt under 36%.
What is the 28/36 rule?
The 28/36 rule says housing costs (PITI + HOA) should stay under 28% of gross monthly income and total debt (housing + car + credit cards + student loans) should stay under 36%.
Does this include property tax and insurance?
Yes. The calculator uses estimated property tax (1.1% annually) and insurance (0.35% annually) based on national averages, plus PMI when your down payment is below 20%.
What down payment do I need?
Conventional loans generally allow 3–20% down. FHA allows 3.5% with a 580 credit score. Putting 20% down eliminates PMI.
How does mortgage rate affect affordability?
A 1 percentage-point rate increase reduces how much house you can afford by roughly 10%. Lower rates buy you more home at the same monthly payment.