Mortgage Affordability Calculator

How much house can I afford?

The answer starts with your income. A common rule lenders use is that your monthly housing costs — principal, interest, taxes, and insurance (PITI) — should stay at or below 28% of your gross monthly income. At the same time, all of your monthly debt obligations combined, including the mortgage, should not exceed 36%. This mortgage affordability calculator applies both limits and tells you which one is the tighter constraint for your situation.

The 28/36 rule explained

The 28/36 rule is a two-part debt-to-income (DTI) test that has guided mortgage lending for decades. It works as follows: first, the lender looks at your housing expense alone; second, it looks at your total monthly debt load.

Front-end ratio (28%)

The front-end ratio — sometimes called the housing ratio — compares your monthly PITI to your gross monthly income. If your income is $7,500 per month, a 28% front-end cap means your housing payment should not exceed $2,100. Property taxes and homeowner's insurance are included in the PITI figure, so the actual amount available for principal and interest is lower than $2,100 after those costs are subtracted. The calculator does this math automatically.

Back-end ratio (36%)

The back-end ratio — also called the total DTI — adds your housing payment to all other recurring debt obligations and compares that sum to your gross income. At $7,500 per month with a 36% cap, your total monthly debt load (mortgage plus auto loan, student loans, minimum credit-card payments, etc.) should not exceed $2,700. If you already carry $500 in monthly debts, only $2,200 is left for the mortgage — potentially less than the front-end cap allows. The binding constraint is whichever limit is lower.

How this calculator works

The tool converts your annual income to a gross monthly figure, then applies your chosen front-end and back-end ratios to find two PITI caps. It takes the lower of the two as your maximum monthly housing payment. Using that cap plus your down payment, loan term, interest rate, and local tax-and-insurance percentage, it solves algebraically for the highest home price whose PITI fits within the limit. The result is the maximum home price, the implied loan amount, and the estimated monthly payment.

What lenders actually look at

The 28/36 rule is a starting framework, not a final answer. Lenders also review your credit score and history, employment stability and income documentation, cash reserves after closing, the loan-to-value ratio, the property type and appraisal, and the specific program you are applying for. Conventional loans, FHA loans, and VA loans all have different DTI tolerances — some programs allow back-end ratios of 43%, 45%, or higher for borrowers with strong credit and reserves. The affordability number from this tool is a useful budget anchor, but only a formal pre-approval from a lender establishes what you can actually borrow.

Worked example

Suppose you earn $90,000 a year, have $500 in existing monthly debts (a car payment and minimum credit-card payments), plan to put $60,000 down, can get a 6.5% rate on a 30-year mortgage, and estimate property taxes plus homeowner's insurance at 1.5% of the home's value per year.

• Gross monthly income: $90,000 ÷ 12 = $7,500
• Front-end cap (28%): $7,500 × 0.28 = $2,100/month PITI
• Back-end cap (36%) minus existing debts: ($7,500 × 0.36) − $500 = $2,700 − $500 = $2,200/month PITI
• Binding constraint: front-end at $2,100 (the lower limit)
• P&I factor at 6.5% / 30 years: approximately 0.006321 per dollar of loan
• Solving for maximum home price: approximately $337,000–$340,000 depending on exact rounding
• Maximum loan: home price minus $60,000 down payment

Plug those same numbers into the calculator above and you will see the precise result. Changing the tax-and-insurance rate even half a percent shifts the maximum price noticeably, which is why using your actual local rate matters.

How to afford more house

There are a limited number of levers that change the affordability ceiling. Increase income — a raise, a second income stream, or a co-borrower's income raises both caps proportionally. Pay down existing debts — reducing your monthly obligations directly expands the back-end room for the mortgage. Grow the down payment — a larger down payment reduces the loan needed for a given price, which lets a fixed PITI budget stretch to a higher purchase price. Find a lower rate — even a quarter-point reduction lowers the P&I portion of PITI, freeing budget room. Choose a longer term — a 30-year amortization spreads the principal over more payments, lowering P&I, though you pay more interest over the life of the loan. Reduce the tax and insurance burden — shopping for better insurance rates or targeting a lower-tax area can have a meaningful effect on the PITI cap calculation.