Home Affordability
Mortgage lenders use two primary rules to determine how much house you can afford: the 28% front-end rule (housing costs should not exceed 28% of gross monthly income) and the 36% back-end rule (all debt payments should not exceed 36% of gross income). Our affordability calculator applies both rules to your income and existing debts to give you a maximum purchase price and a recommended price range.
Max Home Price
$
About the Home Affordability Calculator
Mortgage lenders use two primary rules to determine how much house you can afford: the 28% front-end rule (housing costs should not exceed 28% of gross monthly income) and the 36% back-end rule (all debt payments should not exceed 36% of gross income). Our affordability calculator applies both rules to your income and existing debts to give you a maximum purchase price and a recommended price range.
How to use it
- Enter your gross monthly household income.
- Enter existing monthly debt payments: student loans, car payment, credit cards.
- Enter your available down payment and estimated property tax rate.
- See the maximum home price under each rule, and a recommended "comfortable" price.
Formula & methodology
Max housing payment (28% rule) = Gross monthly income × 0.28. Max total debt (36% rule) = Gross monthly income × 0.36. Max housing under 36% rule = Max total debt − Existing monthly debts. Max purchase price from payment: P = PMT × ((1+r)^n − 1) / (r(1+r)^n).
Common use cases
- Setting a realistic home search budget before shopping
- Understanding why existing debt reduces buying power significantly
- Modeling what a down payment size does to max purchase price
- Stress-testing affordability at higher interest rates
- Comparing 20% vs 10% down payment impact on affordable price range
Frequently asked questions
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