Mortgage Affordability Calculator

How Much House Can I Afford? The 28/36 Rule Explained

The most common guideline lenders use to determine how much house you can afford is the 28/36 rule. This rule sets two limits on your debt relative to your gross monthly income, and the lower of the two determines your maximum housing budget.

The Front-End Ratio (28%)

The front-end ratio says your total monthly housing costs should not exceed 28% of your gross monthly income. Housing costs include your mortgage principal and interest, property taxes, homeowner's insurance, and any HOA fees. This is sometimes called the "housing ratio" or "PITI ratio" (principal, interest, taxes, insurance).

The Back-End Ratio (36%)

The back-end ratio says your total monthly debt — housing costs plus all other recurring debt payments — should not exceed 36% of your gross monthly income. Other debts include car payments, student loans, credit card minimum payments, personal loans, and child support.

What Lenders Actually Look At

• Credit score: A higher score can qualify you for better rates and sometimes higher DTI limits (up to 43% or even 50% for some programs).
• Down payment: A larger down payment reduces your loan amount and can eliminate private mortgage insurance (PMI), lowering your monthly costs.
• Employment history: Lenders typically want to see at least two years of steady employment.
• Cash reserves: Having several months of mortgage payments saved shows financial stability.
• Debt-to-income ratio: While 28/36 is the standard, FHA loans allow up to 31/43, and some conventional lenders stretch to 50% back-end with strong compensating factors.

Tips for Maximizing Your Home Buying Budget

Pay down existing debts before applying to improve your back-end ratio. A higher credit score unlocks lower interest rates, which means a larger loan for the same monthly payment. Consider a 30-year term for lower payments (and higher purchasing power) versus a 15-year term for faster equity building and less total interest paid.

What This Calculator Does Not Include

This calculator uses the conservative 28/36 rule as a guideline. Your actual approval amount may differ based on your credit profile, the lender's specific underwriting guidelines, and loan program requirements. It also does not include private mortgage insurance (PMI), which is typically required for down payments below 20%.