How Much House Can I Afford?

The 28/36 rule, explained

Mortgage lenders have used this guideline for decades:

• 28% front-end ratio: housing costs (PITI) ≤ 28% of gross monthly income.
• 36% back-end ratio: housing + all other monthly debts ≤ 36% of gross monthly income.

Your affordable price is whichever rule gives the lower number. Heavy car or student-loan payments? The 36% rule binds, and paying those down raises your home budget more than a raise would.

Why most "affordability" estimates lie

They quote principal + interest only. On a $400,000 home, property tax and insurance routinely add $400–700/month — a 25–40% uplift. Add HOA fees if applicable. The calculator above includes tax and insurance so the number you see is the number you'd actually pay.

Three ways to afford more house (safely)

1. Bigger down payment: 20% also kills PMI (private mortgage insurance), which can cost 0.5–1% of the loan yearly.
2. Kill monthly debts first: every $200/month of debt eliminated can add ~$35,000 to your affordable price.
3. Buy the rate down: paying discount points (1% of loan ≈ 0.25% rate cut) pays off if you stay 5+ years.

Affordability ≠ approval

This is a planning estimate. Actual lenders check credit score, employment history, debt-to-income with their own overlays, and appraisal value. Get pre-approved — not just pre-qualified — before house hunting.

Frequently asked questions