Home Affordability Calculator
The 28/36 Rule
Income vs. Max Home Price
Rough estimates at 7% rate, 30-year term, 20% down, no other debts:
Tips
- Lender maximum and comfortable maximum are different. Qualifying for the maximum loan doesn't mean it fits your lifestyle and savings goals.
- Budget 1–2% of home value annually for maintenance and repairs. A $400k home may need $4k–$8k per year on average.
- If putting down less than 20%, add estimated PMI costs to your monthly budget. PMI can be canceled once you reach 20% equity.
Frequently Asked Questions
What is the 28/36 rule?
The 28/36 rule is a guideline lenders use to assess mortgage affordability. Your monthly housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income. Your total monthly debt payments (housing + car loans, student loans, credit card minimums) should not exceed 36% of gross monthly income.
What counts as monthly debt?
Include minimum monthly payments on: car loans, student loans, personal loans, and credit cards. Do not include utilities, groceries, subscriptions, or the new mortgage you are calculating. The new mortgage payment is what we are solving for.
Does this include PMI?
No. If your down payment is less than 20%, lenders typically require Private Mortgage Insurance (PMI), which usually costs 0.5–1.5% of the loan amount annually. Add $50–$200/month to your estimated payment if putting less than 20% down.
How does credit score affect how much I can afford?
Credit score affects your interest rate, which directly affects your monthly payment and maximum loan amount. Borrowers with scores above 760 qualify for the best rates. A 1% difference in rate on a $400,000 loan changes the monthly payment by about $240 and total interest by nearly $90,000.