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How much house can I afford

Enter your annual income, monthly debts, down payment, interest rate, and term. The calculator uses the 28/36 affordability rule to estimate the home price, the maximum monthly payment, and the loan it supports.

Use it to estimate a sensible home price for your income and debts before you start house hunting.

USD
USD
USD
%
years

Affordable price

$380,262

Max monthly payment
$2,100
Loan amount
$350,262

The result updates as you type. The headline is the affordable price; the others show the monthly payment budget and the loan it funds.

How does it work?

Uses the 28/36 rule: housing payment up to 28% of gross income, total debts up to 36%. The payment is converted to a loan, then the down payment is added. It excludes taxes, insurance, and lender specifics.

Home affordability formula

price=P 1−(1+r)−nr+D\text{price} = P\,\frac{1-(1+r)^{-n}}{r} + D
price
Affordable home price.
P
Maximum monthly housing payment.
r
Monthly interest rate (annual ÷ 12).
n
Number of monthly payments (years × 12).
D
Down payment.

On 90,000 income, no other debts, 30,000 down, 6% over 30 years: the budget is about 2,100 a month, supporting a ~350,000 loan, so roughly 380,000.

Method & sources

Uses the 28/36 rule: housing up to 28% of gross income, total debts up to 36%. The payment is converted to a loan with the standard annuity formula. The affordable price adds the down payment to the loan.

Sources

Where this method comes from — use these references to understand the formula, assumptions, and limits.

How we calculate

  • Uses the 28/36 rule: housing up to 28% of gross income, total debts up to 36%.
  • The payment is converted to a loan with the standard annuity formula.
  • The affordable price adds the down payment to the loan.
  • Property taxes, insurance, and lender rules are not included.

Rounding

Money is shown as whole units. The calculation uses full precision.

What this calculator does

Lenders cap how much of your income can go to housing and debt. This calculator applies the common 28/36 rule to find your monthly housing budget, converts that into a loan amount at your rate and term, then adds your down payment to estimate an affordable price.

How to use it

  1. Enter your gross annual income.
  2. Enter your total monthly debt payments.
  3. Enter your down payment, interest rate, and term.
  4. Read the affordable price and monthly budget.

A worked example

On 90,000 income, no other debts, 30,000 down, 6% over 30 years, the housing budget is about 2,100 a month, which supports roughly a 350,000 loan — an affordable price near 380,000.

What the 28/36 rule means

Housing costs should stay within 28% of gross income, and all debt payments within 36%. Existing debts reduce your housing budget. It's a guideline, not a guarantee of approval.

Common mistakes

  • Forgetting that taxes and insurance add to the real monthly cost.
  • Using net income instead of gross.
  • Treating the estimate as a lender's official offer.

When it's useful

Before house hunting, when setting a realistic budget, or to see how paying down debt or saving a bigger deposit changes what you can afford.

FAQ

How is affordability calculated?
The 28/36 rule sets a monthly housing budget from your income minus debts. That payment is converted to a loan, and the down payment is added for the price.
What is the 28/36 rule?
Housing costs up to 28% of gross monthly income, and all debt payments up to 36%. It's a common lender guideline.
Does it include taxes and insurance?
No. The estimate covers principal and interest. Property taxes and insurance add to the real monthly cost, so leave headroom.
Should I use gross or net income?
Gross — before tax. The 28/36 ratios are based on gross monthly income.
Is this a mortgage approval?
No. It's an estimate. Lenders also weigh credit, employment, and their own rules before approving a loan.
Can I share a calculation?
Yes. Use Share to copy a link that reopens the calculator with the same figures.

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