What is the 28/36 rule?

This is a traditional lender guideline stating that your housing payment should not exceed 28% of gross monthly income (front-end ratio), and all debt payments combined should not exceed 36% of gross income (back-end ratio). While government-backed loans like FHA may allow up to 43% DTI, following the 28/36 rule provides a financial cushion and significantly reduces the risk of becoming "house-poor" — where most of your income goes to housing costs with little left for savings, emergencies, and other goals.

Does this include property taxes and insurance?

Yes. It uses the property tax rate and annual insurance premium you enter (defaults: 1.1% of the home price and $1,500 per year) and subtracts them from your housing budget before sizing the loan. Actual property tax rates vary significantly by location — from under 0.5% of home value annually in some areas to over 2.5% in others — so look up your county rate and get an insurance quote for the specific property.

What is PMI and when can I avoid it?

Private Mortgage Insurance protects the lender (not you) when your down payment is less than 20% of the purchase price. It typically costs 0.5-1.5% of the loan amount per year (about $125-$375/month on a $300,000 loan). You can avoid PMI by saving a 20% down payment, using a conventional loan with a "piggyback" second mortgage (80/10/10 structure), or using certain loan programs like VA loans which do not require PMI.

Should I max out what the calculator allows?

Not necessarily. The calculator shows the maximum loan amount the bank would approve, not what is most comfortable for your lifestyle. Lenders may approve you at 43% DTI, but many financial advisors suggest targeting 28-33% to maintain flexibility for retirement savings, emergencies, travel, and other life goals. Consider your full financial picture, not just the approval maximum.

How much should I put down on a house?

The traditional recommendation is 20% to avoid PMI, but many buyers put down less. FHA loans allow as little as 3.5% down, and conventional loans may allow 3-5% for qualified buyers. A larger down payment means lower monthly payments, less total interest, and no PMI. However, it is also important to keep an emergency fund after closing — depleting all savings for a down payment can be risky.

House Affordability

Find out the maximum home price you can afford based on your income, debts, and down payment. Free, instant, and accurate.

✓ Tested formula & cited sources Checked against independent sources · Oct 18, 2026 Private: runs in your browser

Annual Gross Income

Combined household gross income before taxes

Total Monthly Debt Payments

Auto loans, student loans, minimum credit card payments, personal loans, and other recurring monthly obligations.

Down Payment Available

Cash you have saved for the upfront down payment on a home.

DTI Target Limit

Maximum total debt-to-income ratio (housing + other debts). The housing-only (front-end) cap is paired automatically: 28% up to 36%, 31% up to 43%, 36% above.

Custom Back-End DTI Limit (%)(%)

Only used if Custom DTI is selected above

Interest Rate(%)

Current mortgage interest rate offered by your lender.

Loan Term

Length of the mortgage — shorter terms have higher payments but less interest.

Property Tax Rate (optional)(%)

Annual property tax as a % of home value. Blank = 1.1% (US average).

Annual Home Insurance (optional)

Annual homeowners insurance premium. Blank = $1,500.

PMI Rate (optional)(%)

Annual PMI as a % of the loan, charged only when the down payment is under 20% (typically 0.3–1.5%). Blank = PMI not modelled.

Results

Maximum Home Price You Can Afford

$283,344

This puts your housing at 22% of gross income and your back-end DTI (all debt including housing) at 28% — lenders typically cap around 43-45%. It's the lender's ceiling, not a comfort level; buying meaningfully below this leaves breathing room for maintenance, rate changes, and life's surprises.

Maximum Loan Amount: $223,344
Total Monthly Housing Payment (PITI): $1,833.33/mo
Est. Principal & Interest (P&I): $1,448.60/mo
Property Tax & Insurance: $384.73/mo
Down Payment as % of Home Price: 21.2% — No PMI!
Front-End DTI (Housing Only): 22.0%
Back-End DTI (All Debts): 28.0%

Making a decision? Your monthly payment, debt-to-income, the cash to close, and whether buying beats renting, in one flow. Can I afford this house? →

The formula

Housing = min(Income × Front %, Income × Back % − Debts) → Price = (Housing − Insurance + Down × k) ÷ (k + Tax Rate ÷ 12)

DTI Ratios: Front-End & Back-End DTI
PITI: Total Housing Payment
PMI: Private Mortgage Insurance

Worked example — Annual Gross Income 100000, Total Monthly Debt Payments 500, Down Payment Available 60000, Custom Back-End DTI Limit (%) 40 %

Maximum Home Price You Can Afford = $283,344

Full explanation ↓

How House Affordability Works

Housing = min(Income × Front %, Income × Back % − Debts) → Price = (Housing − Insurance + Down × k) ÷ (k + Tax Rate ÷ 12)

Working backward from your DTI limit: the housing payment is capped by the lower of the front-end limit (Monthly Income × Front %) and the back-end limit (Monthly Income × Back % − Existing Debts). Property tax and insurance come out of that payment first, and what remains pays principal and interest on the loan. Because property tax is a percentage of the price, the maximum price is solved directly from k, the monthly payment per $1 borrowed.

This calculator uses the same engine as the Home Affordability Calculator.

DTI Ratios: Front-End & Back-End DTI — Back-end DTI = (all debts including housing) / gross monthly income. Front-end DTI = housing only / income. The 28/36 rule is standard: housing ≤ 28%, all debts ≤ 36%. 43% is the FHA standard back-end limit; some programs approve higher with compensating factors.
PITI: Total Housing Payment — Principal, Interest, Taxes, and Insurance — the four components of the true monthly cost of homeownership. Property tax (default 1.1% of the price per year) and insurance (default $1,500 per year) are estimated separately and come out of the housing payment first.
PMI: Private Mortgage Insurance — Required by lenders when your down payment is less than 20% of the purchase price. It protects the lender (not you) against default and typically costs 0.5-1.5% of the loan amount per year (about $125-$375/month on a $300,000 loan). Enter a PMI rate above to include it in the payment.

Lenders use the 28/36 rule where housing costs should not exceed 28% of income and total debts should not exceed 36% of income to determine borrowing capacity

Understanding the Result

This calculator works backward from your income — the same approach lenders use when evaluating mortgage applications. The key number is the back-end DTI, which measures all your monthly debts (including the proposed mortgage payment) as a percentage of gross monthly income. A 36% back-end DTI on a $100,000 annual income means you can have $3,000/month in total debt payments. If you already pay $500 in existing debts, the back-end limit leaves $2,500 for housing, but the 28% front-end limit caps housing at $2,333, so $2,333 is the budget.

Property tax and insurance are taken out of that (about $322 and $125 per month at the defaults on a $351,000 home), leaving about $1,887 for principal and interest. That payment is then reversed through the mortgage formula to give the maximum loan and, with your down payment, the maximum home price (about $351,000 with $60,000 down at 6.75% over 30 years).

How to Use

Enter your combined annual household gross income (before taxes and deductions).
Enter all your current monthly debt payments — auto loans, student loans, minimum credit card payments, personal loans.
Enter how much you have available for a down payment — larger down payments reduce or eliminate PMI.
Select your comfort level with debt. Conservative 28% is safest; Moderate 36% is common; Aggressive 43% is the FHA standard limit.
Enter the current mortgage interest rate and desired loan term to see your maximum affordable home price.

Frequently Asked Questions

What is the 28/36 rule?: This is a traditional lender guideline stating that your housing payment should not exceed 28% of gross monthly income (front-end ratio), and all debt payments combined should not exceed 36% of gross income (back-end ratio). While government-backed loans like FHA may allow up to 43% DTI, following the 28/36 rule provides a financial cushion and significantly reduces the risk of becoming "house-poor" — where most of your income goes to housing costs with little left for savings, emergencies, and other goals.
Does this include property taxes and insurance?: Yes. It uses the property tax rate and annual insurance premium you enter (defaults: 1.1% of the home price and $1,500 per year) and subtracts them from your housing budget before sizing the loan. Actual property tax rates vary significantly by location — from under 0.5% of home value annually in some areas to over 2.5% in others — so look up your county rate and get an insurance quote for the specific property.
What is PMI and when can I avoid it?: Private Mortgage Insurance protects the lender (not you) when your down payment is less than 20% of the purchase price. It typically costs 0.5-1.5% of the loan amount per year (about $125-$375/month on a $300,000 loan). You can avoid PMI by saving a 20% down payment, using a conventional loan with a "piggyback" second mortgage (80/10/10 structure), or using certain loan programs like VA loans which do not require PMI.
Should I max out what the calculator allows?: Not necessarily. The calculator shows the maximum loan amount the bank would approve, not what is most comfortable for your lifestyle. Lenders may approve you at 43% DTI, but many financial advisors suggest targeting 28-33% to maintain flexibility for retirement savings, emergencies, travel, and other life goals. Consider your full financial picture, not just the approval maximum.
How much should I put down on a house?: The traditional recommendation is 20% to avoid PMI, but many buyers put down less. FHA loans allow as little as 3.5% down, and conventional loans may allow 3-5% for qualified buyers. A larger down payment means lower monthly payments, less total interest, and no PMI. However, it is also important to keep an emergency fund after closing — depleting all savings for a down payment can be risky.

Common Uses

•Determine the maximum home price you can qualify for based on your income, existing debts, and available down payment.
•Compare how different DTI comfort levels — conservative, moderate, or aggressive — affect your home buying budget.
•Plan your home search by understanding how interest rates and loan terms translate into a maximum affordable purchase price.

Sources

Was this calculator helpful?

Cite this calculator

TheCalcUniverse. "House Affordability Calculator — How Much Can I Afford?." TheCalcUniverse, 2026, https://thecalcuniverse.com/finance/house-affordability-calculator/. Accessed October 25, 2026.

Embed this calculator on your site

Free to embed. Paste this into any HTML page — it stays up to date automatically.

<iframe src="https://thecalcuniverse.com/embed/finance/house-affordability-calculator/"
  width="100%" height="620" frameborder="0" loading="lazy"
  title="House Affordability Calculator — How Much Can I Afford?"
  style="border:none;max-width:640px;margin:0 auto;display:block;">
</iframe>
<p style="text-align:center;font-size:12px;margin:4px auto;max-width:640px;">
  Calculator by <a href="https://thecalcuniverse.com/finance/house-affordability-calculator/">House Affordability Calculator — How Much Can I Afford? — TheCalcUniverse</a>
</p>

Open embed ↗