Home Affordability Calculator (28/36 Rule)
Example: Gross annual income: 110000 $ · Other monthly debt payments: 500 $ · Mortgage interest rate: 6.5 % · Loan term: 30 years · Down payment: 20 % · Est. monthly taxes + insurance: 500 $
| Maximum home price | $408,711 |
| Maximum loan amount | $326,969 |
| Max principal & interest budget | $2,067 |
Worked example
On $110,000 of income, that is $9,167 a month. The 28% front-end cap is about $2,567 for housing; the 36% back-end cap is $3,300 minus your $500 of other debts, or $2,800. The tighter limit is the front-end $2,567, less $500 of taxes and insurance, leaving roughly $2,067 for principal and interest. At 6.5% over 30 years that supports a loan near $327,000, and with 20% down a home price around $409,000.
Frequently asked questions
What is the 28/36 rule?
It is a lending guideline: keep your total housing payment at or below 28% of gross monthly income (the front-end ratio) and all debt payments at or below 36% (the back-end ratio). Staying inside both is what most conventional lenders want to see.
Should I borrow the maximum I qualify for?
Usually not. The 28/36 rule is a ceiling, not a target. Buying below your max leaves room for maintenance, emergencies, and life changes, and keeps your payment comfortable if rates or expenses rise.
Does a bigger down payment let me afford more house?
Yes, indirectly. A larger down payment means a smaller loan for the same price, so a given monthly budget stretches to a higher home price. It can also help you avoid PMI and secure a better rate.
What counts as monthly debt?
Recurring obligations lenders see on your credit report: car loans, student loans, minimum credit-card payments, and other installment debts. It generally does not include utilities, groceries, or the new mortgage itself.