Real Affordability Calculator: PITI Plus Life
Example: Monthly gross income: 8000 $ · Monthly income taxes (all-in): 1600 $ · Monthly principal & interest: 2100 $ · Monthly property tax: 400 $ · Monthly homeowners insurance: 150 $ · Monthly HOA dues: 0 $ · Monthly maintenance reserve (1% rule ÷ 12): 300 $ · Monthly child care / education: 0 $ · Monthly retirement contributions: 600 $ · Monthly car payment(s): 400 $ · Other monthly debt payments: 200 $ · Monthly groceries, utilities, subscriptions: 900 $ · Emergency fund currently saved: 15000 $
| Monthly cash left over | $1,350 |
| Housing-to-gross-income ratio | 36.88% |
| Total obligations-to-gross-income ratio | 63.13% |
| Total monthly housing cost (PITI+maint) | $2,950 |
| Emergency fund covers (months of obligations) | 2.97 |
Worked example
On $8,000 gross income ($6,400 take-home after $1,600 tax): PITI + maintenance totals $2,950. Add retirement $600, car $400, other debts $200, groceries/utilities $900 — total obligations of $5,050, leaving $1,350/month. The bank's 28% front-end limit allows $2,240 in housing; this family is at 37% of take-home on housing alone. The $15,000 emergency fund covers about 3 months of obligations — acceptable but thin for a new homeowner.
Frequently asked questions
What does the bank's 28/36 rule actually mean?
The 28% front-end ratio caps your housing payment (PITI) at 28% of gross income. The 36% back-end ratio caps all debts (housing + car + student loans + credit cards) at 36% of gross. These are qualifying limits, not comfort limits — they exclude retirement, child care, and living expenses.
How much monthly cushion should I have after all expenses?
Financial planners commonly suggest having at least $500–$1,000/month left over after all fixed obligations, in addition to an emergency fund. Less than $500 leaves little buffer for irregular expenses like car repairs or medical bills.
Why include the maintenance reserve as a housing cost?
Homes require 1–2% of their value annually in upkeep on average — roof, HVAC, appliances, plumbing. Omitting this from the housing budget is how buyers end up cash-strapped in year two. The CFPB recommends factoring maintenance costs into affordability before purchasing.