Home Affordability Calculator – How Much House Can I Afford?
Calculate how much house you can afford based on income, down payment, and debts.
How Much House Can You Afford?
Mortgage lenders use the 28/36 rule: your monthly mortgage payment should not exceed 28% of gross monthly income, and all debt payments combined (mortgage, car, student loans) should not exceed 36%. These are qualifying thresholds, not optimal targets.
| Annual Income | Max Monthly Mortgage (28%) | Approximate Home Price* |
|---|---|---|
| ,000 | ,400 | ~,000 |
| ,000 | ,867 | ~,000 |
| ,000 | ,333 | ~,000 |
| ,000 | ,500 | ~,000 |
*Assuming 20% down, 7% 30-year fixed rate. Down payment significantly affects affordability: 20% down eliminates PMI (Private Mortgage Insurance, typically 0.5–1.5% annually), saving ,500–,500/year on a ,000 loan.
What is the 28/36 rule for home buying?
The 28/36 rule: housing costs should not exceed 28% of gross monthly income, and total debt (including mortgage) should not exceed 36%. These are lender guidelines, not personal finance targets — many advisors recommend keeping mortgage under 25% of take-home pay.
What is PMI and when can I avoid it?
PMI (Private Mortgage Insurance) is required when your down payment is less than 20%. It costs 0.5–1.5% of loan value annually. With 20% down, PMI is not required, saving hundreds per month.