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Home affordability calculator

Home affordabilitythe 28/36 rule
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Home price you can afford

$392,243
Max monthly payment$2,100
Max loan$332,243
Down payment$60,000

On $90,000 a year with $500/month in other debt, a lender's 28/36 rule caps your housing payment at $2,100/month — enough for a $392,243 home with your $60,000 down.

The 28% housing rule is your limit here, not your other debts. Even with no car or card payments, a lender would hold your housing payment to about $2,100/month.

Show the work
  1. Gross monthly income: $90,000 ÷ 12 = $7,500
  2. Front-end cap (28% for housing): $7,500 × 28% = $2,100/month
  3. Back-end cap (36% for all debt): $7,500 × 36% − $500 debt = $2,200/month
  4. Max housing payment: the smaller of the two = $2,100/month (the 28% housing rule binds)
  5. Max loan: $2,100/month at 6.5% over 360 months, run through the mortgage formula in reverse = $332,243
  6. Max home price: $332,243 loan + $60,000 down = $392,243

This ceiling is principal and interest only. Property tax, insurance, PMI, and HOA dues make the real monthly payment higher — check the mortgage calculator for the full picture on a home at this price.

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Before you shop for a mortgage, you need the number that comes first: how much house you can actually afford. Lenders answer it with a simple guideline called the 28/36 rule, applied to your income, your existing debts, and your down payment. This calculator runs that rule and shows the max home price it produces — along with the max monthly payment and max loan behind it, and which limit is holding you back.

The 28/36 rule, explained

The rule sets two ceilings, both measured against your gross monthly income — your pay before taxes, divided by twelve.

  • The 28% front-end ratio. Your monthly housing payment should stay under 28% of gross monthly income. On $90,000 a year — $7,500 a month — that's $2,100 for the mortgage.
  • The 36% back-end ratio. Your housing payment plus all other monthly debt should stay under 36%. On the same income that's $2,700 total, so if you already pay $500 a month toward a car and student loans, only $2,200 is left for housing.

Your real budget is the tighter of the two. In that example the 28% housing limit ($2,100) is lower than what the debt rule allows ($2,200), so $2,100 is the ceiling and the front-end ratio is said to "bind." Add more debt and the back-end ratio takes over. The calculator labels which one is binding so you know whether to focus on your income or on paying down debt.

From a monthly payment to a home price

Knowing you can spend $2,100 a month isn't the answer on its own — you want a price tag. To get there we run the standard mortgage payment formula in reverse. A payment of P at a monthly rate r over n months supports a loan of:

loan = P × (1 − (1 + r)⁻ⁿ) ÷ r

At 6.5% over 30 years, a $2,100 payment supports a loan of about $332,000. Add a $60,000 down payment and the most you can pay for the home is roughly $392,000. Raise the rate and the same $2,100 buys a smaller loan; shorten the term and the payment for any loan climbs, which also shrinks what you can borrow. The two sliders let you watch both effects live.

What lenders actually look at

The 28/36 rule is the backbone, but an underwriter weighs more than two ratios:

  • Credit score. It sets the interest rate you're offered, which directly changes how much loan a given payment supports.
  • Down payment. More cash down means a smaller loan and, past 20%, no private mortgage insurance — which frees up room in the 28% housing budget.
  • Debt-to-income ratio. The 36% back-end number is the single figure lenders scrutinize most. Minimum payments on cards and loans count; day-to-day spending like groceries does not.
  • Cash reserves and job history. Steady income and a few months of savings can let a lender stretch the ratios; thin reserves tend to tighten them.

What this number does not include

To keep every figure on this page easy to verify by hand, the budget is built on principal and interest only. The payment you'll actually make on a home is bigger, because a real mortgage bundles in:

  • Property tax — often near 1% of the home's value a year, collected monthly through escrow.
  • Homeowners insurance — commonly $1,500–$3,000 a year.
  • PMI — private mortgage insurance when you put down less than 20%.
  • HOA dues — if the property is in an association.

Lenders fit those extras inside the 28% and 36% ceilings, so in practice the price you qualify for is somewhat lower than the principal-and-interest number here. Treat this result as a clear starting ceiling, then run the specific home through the mortgage calculator to see the full monthly cost with taxes, insurance, and PMI folded in.

Tips to stretch your budget

  • Pay down a monthly payment, not just a balance. Erasing a $400/month car loan can lift your housing budget more than paying down a card you barely touch — the back-end ratio only cares about the monthly number.
  • Shop the rate. Even a half-point lower rate meaningfully raises the loan a fixed payment supports. Move the rate slider to see it.
  • Grow the down payment. Every extra dollar down is a dollar added straight to your max price, and crossing 20% drops PMI.
  • Leave a cushion. Qualifying for the maximum isn't the same as being comfortable there. Many buyers deliberately target a payment below the 28% line to leave room for repairs, emergencies, and life.

Frequently asked questions

How much house can I afford on a $90,000 salary?

With no other monthly debt, a $60,000 down payment, and a 6.5% rate over 30 years, $90,000 a year supports a home of about $360,000 under the 28% housing rule — a $300,000 loan plus your down payment. Add $500 a month of other debt and the number holds at about $392,000, because your housing payment is still the binding limit. Higher debts, a higher rate, or a shorter term all lower it. This is principal and interest only; taxes and insurance make the real payment higher.

What is the 28/36 rule?

It is the affordability guideline most lenders use. Your monthly housing payment should stay under 28% of your gross (pre-tax) monthly income — that is the front-end ratio. Your housing payment plus every other debt payment (car, student loans, credit card minimums) should stay under 36% — the back-end ratio. Your budget is the tighter of the two.

Does this include property taxes and insurance?

No. This calculator caps your budget on principal and interest so every number stays easy to check. In reality, lenders apply the 28/36 rule to the full PITI payment — principal, interest, taxes, and insurance — plus PMI and HOA dues if they apply. Those extras raise the true monthly cost, so treat this max price as a starting ceiling and run the winning home through a mortgage calculator for the all-in payment.

How much income do I need to buy a $400,000 house?

With $80,000 down, a 6.5% rate, and a 30-year term, the $320,000 loan needs a principal-and-interest payment of about $2,022 a month. Under the 28% housing rule that payment requires roughly $86,700 in gross annual income if you carry no other debt. Any car or card payments push the income you need higher, because they eat into the 36% back-end limit.

Why is my max home price lower than I expected?

Three things pull it down the most: other monthly debts, the interest rate, and the loan term. High debts can make the 36% back-end ratio bind before the housing rule does. A higher rate means the same payment buys a smaller loan. A shorter term raises the payment for any given loan, so it lowers the loan a fixed budget supports. The calculator tells you which rule is binding so you know what to change.

Is the 28/36 rule a hard limit?

No. It is a guideline, and many loan programs allow higher ratios. FHA loans often permit a back-end ratio up to 43% or more, and strong credit or large reserves can stretch it further. The rule is a conservative starting point that keeps the payment comfortable, not the absolute maximum a lender will approve.

Last reviewed July 2026. This tool is for education, not financial advice.