How Much House Can I Afford
Find out how much home you can afford based on your income, debts, and down payment using the 28/36 rule lenders apply.
Monthly Payment Breakdown
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Based on your income and credit, compare personalized pre-approval offers from top lenders — no impact to your credit score.
How the Affordability Calculator Works
This calculator uses the 28/36 rule that most lenders follow when qualifying borrowers. The front-end ratio caps your housing costs at 28% of gross monthly income. The back-end ratio limits total debt payments — housing plus car loans, student loans, and credit cards — to 36% of gross income. The calculator takes the lower of these two limits and works backward to find your maximum home price.
What Counts as Monthly Debt
Include minimum payments on credit cards, car loans, student loans, personal loans, and any other recurring monthly obligations that show up on your credit report. Do not include utilities, groceries, subscriptions, or insurance premiums — lenders only count debts reported to credit bureaus. If you are unsure about your total debt payments, pull your credit report and add up the minimum payments listed.
Down Payment and Its Impact
A larger down payment increases your buying power because it reduces the loan amount and the resulting monthly payment. With 20% down, you also avoid private mortgage insurance (PMI), which typically costs 0.5-1% of the loan annually. Putting down less than 20% is common — FHA loans require just 3.5% — but your maximum affordable price drops because PMI adds to your monthly housing cost. Use our mortgage calculator to see how different down payments change your monthly payment.
Interest Rate Matters More Than You Think
A 1% difference in interest rate can change your maximum home price by $30,000-$50,000 depending on your income. Rates vary by lender, credit score, and loan type. Check current mortgage rates before running this calculator to get the most accurate result. If you plan to buy in a few months, use a slightly higher rate as a buffer.
Property Taxes and Insurance
Property taxes vary dramatically by state — from under 0.5% in Hawaii to over 2% in New Jersey and Texas. This calculator defaults to 1.2%, which is close to the national average. Enter your actual state or county rate for a more accurate result. Home insurance costs depend on location, coverage amount, and property type. Coastal areas and regions prone to natural disasters will have higher premiums. See our closing costs guide for a full breakdown of what you will pay at the closing table.
Next Steps After Using This Calculator
Once you know your budget, get pre-approved with a lender to confirm the number. Pre-approval involves a credit check and income verification that gives you a firm borrowing limit. Then start looking at homes within your price range — not at the top of it. Leaving room in your budget for maintenance, savings, and unexpected costs is how you avoid becoming house-poor. Read our complete home buying guide for step-by-step instructions on going from calculator to keys.