Home Affordability Calculator

Calculate how much house you can afford based on your income, debts, and down payment using the proven 28/36 rule.

Home Affordability Calculator

Enter your financial information to calculate how much house you can afford

Monthly Gross Income

Your total monthly income before taxes

Monthly Debt Payments

Car loans, credit cards, student loans, etc.

Down Payment

Amount you plan to put down (optional)

Interest Rate

Current mortgage interest rate

Key Features

Uses proven 28/36 rule for accuracy

Includes taxes, insurance, and PMI estimates

Adjustable interest rates and down payments

Comprehensive debt-to-income analysis

Instant results with detailed breakdown

Understanding Affordability

28% Rule: Housing costs ≤ 28% of gross income

36% Rule: Total debt payments ≤ 36% of gross income

PITI: Principal, Interest, Taxes, Insurance

DTI Ratio: Debt-to-income ratio affects loan approval

Tips & Strategies

Improve Credit: 740+ score gets best rates, saves thousands

Down Payment: 20% avoids PMI, but 3-5% programs available

Rate Shopping: Compare lenders within 14-45 days

Hidden Costs: Budget for closing costs (2-5% of price)

Future Planning: Consider job stability and family changes

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Frequently Asked Questions

What is the 28/36 rule and why use it?

The 28/36 rule is a conservative guideline: housing costs ≤ 28% of gross income, total debts ≤ 36%. It helps ensure you can handle mortgage payments while maintaining financial stability and emergency funds.

How much can I afford with bad credit?

Credit scores below 620 may face higher interest rates (+1-2%), reducing buying power by 10-20%. FHA loans accept scores as low as 580, but consider improving credit before buying for better rates.

What extra costs should I budget for?

Beyond PITI, budget for: closing costs (2-5%), moving expenses, immediate repairs, utility setup, and ongoing maintenance (1-2% of home value annually). Keep 3-6 months of payments in reserves.

Should I use all my available budget?

Consider buying below your maximum to preserve financial flexibility. Leave room for property tax increases, interest rate changes (if ARM), job changes, and unexpected expenses.

How do interest rates affect affordability?

Each 1% increase in interest rate reduces buying power by about 10%. For example, at 6% vs 7% on a $300k loan, monthly payment increases by ~$180, significantly impacting affordability.

When should I wait to buy?

Wait if: debt-to-income ratio >43%, no emergency fund, job instability, planning major life changes, or if renting costs significantly less. Sometimes improving finances first saves money long-term.

Important Financial Disclaimer

This home affordability calculator is for educational purposes only and should not replace professional financial advice.Actual loan terms, interest rates, and affordability may vary based on credit score, employment history, debt-to-income ratio, and lender requirements. Results are estimates and do not guarantee loan approval. Always consult qualified mortgage professionals and financial advisors for personalized guidance.