How Much House Can I Afford?
Uses the 28% housing / 36% total debt rule many lenders use for conventional mortgages to estimate a maximum price.
How this calculator works
Many lenders underwriting a conventional mortgage lean on two guideline ratios: your housing payment (principal, interest, tax, insurance, and HOA) shouldn't exceed about 28% of your gross monthly income, and your total debt payments (housing plus everything else, like car loans and credit cards) shouldn't exceed about 36%. This calculator computes both ceilings, uses whichever one is lower (the "binding" rule), subtracts your estimated tax and insurance to find how much is left for principal and interest, then works the standard loan payment formula backward to find the largest loan that fits that payment at your rate and term. Your down payment is added on top to get an estimated max home price. These are common underwriting guidelines, not a guarantee of what any specific lender will approve, and this tool doesn't recommend a price, it just shows the math behind the rule.
Worked example
$90,000 income, $400/month in other debts, a $30,000 down payment, 6.5% rate, 30-year term, and $300/month estimated tax and insurance: monthly income is $7,500, so the 28% rule caps housing at $2,100 and the 36% rule leaves $2,300 for housing after the other debts. The lower number, $2,100, is the binding limit here (the "28% housing rule"). After the $300 tax/insurance estimate, $1,800 is left for principal and interest, which supports a loan of about $284,779, for an estimated max home price of about $314,779.
Frequently asked questions
Is 28%/36% a hard rule?
No. It's a common underwriting guideline, especially for conventional loans, but actual approval depends on the specific lender, loan type (FHA, VA, jumbo, etc.), your credit, reserves, and more. Some loan programs allow a higher debt-to-income ratio than 36%.
Why does my estimated tax and insurance matter so much?
It comes straight out of your housing budget before principal and interest get a turn, so a higher estimate directly lowers the loan amount this calculator can support. Use a real estimate for your area if you have one; it varies a lot by location.
Does this include PMI or HOA fees?
Not separately. If you expect private mortgage insurance (common with under 20% down) or an HOA fee, add a rough monthly estimate into the tax/insurance field so it's accounted for in the housing-payment ceiling.
Assumptions & sources
- 28% housing / 36% total debt-to-income are the widely cited conventional-mortgage underwriting guidelines; actual limits vary by lender and loan program.
- Principal and interest use the standard fixed-rate loan payment formula, solved backward for the loan amount a given payment supports.
- Property tax, insurance, PMI, and HOA are combined into the single monthly estimate you enter; actual costs vary by location and policy.
Educational estimates, not financial advice.