Mortgage Affordability Calculator

"How much house can I afford?" is really a question about how much of your income a lender will let you commit to housing each month — and how that monthly ceiling translates into a maximum purchase price once a down payment, interest rate, and loan term are factored in. Rather than starting from a home price and working out the payment (the job of a standard mortgage calculator), this tool starts from your income and debts and works backwards to a price ceiling: the highest amount you could responsibly finance under a widely used lending guideline called the 28/36 rule.

The 28/36 rule explained

The 28/36 rule is a debt-to-income (DTI) guideline that many conventional lenders still use as a starting point when sizing a mortgage. It sets two independent ceilings on your gross monthly income — one for housing alone, and one for housing plus everything else you owe — and whichever ceiling is lower becomes the limit that actually governs how much you can borrow.

Front-end ratio (28%)

The front-end ratio caps your total monthly housing payment — principal, interest, taxes, and insurance, often abbreviated PITI — at roughly 28% of your gross monthly income. This figure considers housing in isolation: it doesn't yet ask what else you owe, only whether the home payment itself fits comfortably inside your paycheck.

Back-end ratio (36%)

The back-end ratio is the broader test: it caps your housing payment plus every other recurring debt — car loans, student loans, credit-card minimums, personal loans, and similar obligations — at roughly 36% of gross monthly income. Because existing debts eat into this allowance before housing even enters the picture, someone with significant car or student-loan payments may find the back-end ratio, not the front-end ratio, is what actually limits their purchase price.

How this calculator works (income → max price)

The calculator first converts your annual income to a gross monthly figure, then applies both ratios to find two independent housing-payment ceilings: the front-end cap (28% of gross monthly income) and the back-end cap (36% of gross monthly income, minus your existing monthly debts). The smaller of the two — the binding constraint — becomes your maximum allowable PITI payment.

From there, the math runs in reverse. A monthly PITI payment is the sum of a loan's principal-and-interest payment (which depends on the loan amount, rate, and term) plus property tax and insurance (modeled here as a percentage of the home's value). Both pieces grow with the home price, so the calculator solves an equation for the single home value at which the combined PITI exactly equals your maximum allowable payment. That value is your maximum home price; subtracting your down payment gives your maximum loan amount.

What lenders actually look at

DTI ratios are an important starting point, but they're far from the only thing an underwriter weighs. Lenders also consider your credit score and history (which affects both approval odds and the rate you're offered), your employment and income stability, your cash reserves after closing, the loan program you're applying through (some allow back-end ratios well above 36%), and whether private mortgage insurance (PMI) applies because your down payment is below 20%. Two borrowers with identical incomes and debts can receive very different offers once these factors are weighed.

Worked example

Take a household earning $90,000 a year, with $500 in monthly debts, a $60,000 down payment, a 6.5% rate on a 30-year term, and a combined tax-and-insurance rate of 1.5% of home value per year. Gross monthly income is $7,500. The front-end cap is 28% of that, or $2,100; the back-end cap is 36% ($2,700) minus the $500 in debts, or $2,200. The front-end cap is lower, so it binds: the maximum PITI is $2,100. Solving for the home value that produces exactly that PITI — combining the amortized loan payment with the percentage-of-value tax-and-insurance estimate — lands at roughly $325,000–$360,000, depending on the precise local tax-and-insurance rate plugged in. Try the calculator above with these exact figures to see the precise number and which constraint binds for you.

How to afford more house

Three levers move the needle the most. A larger down payment shrinks the loan needed for any given price, freeing up more of your PITI budget for the purchase price itself — and can remove PMI once you cross 20% down. Paying down existing debts raises your back-end cap directly, dollar for dollar, which matters most if the back-end ratio is your binding constraint. And choosing a longer loan term (say, 30 years instead of 15) lowers the monthly principal-and-interest payment for the same loan amount, stretching your budget across more months — though it also means paying more interest in total over the life of the loan. Run the numbers above with each lever adjusted to see which one moves your ceiling the most.