How Much House Can I Afford?
Calculate how much home you can afford based on your income, debts, down payment, and current interest rates.
How Is This Calculated?
This calculator uses the 36% debt-to-income (DTI) rule, which is a common guideline used by lenders. Your total monthly debt payments (including the new mortgage) should not exceed 36% of your gross monthly income. Maximum monthly mortgage payment = (Monthly income × 36%) – Existing monthly debts The maximum loan amount is then calculated using the mortgage payment formula, and the down payment is added to determine the maximum home price.
Frequently Asked Questions
What is the 28/36 rule?
The 28/36 rule suggests spending no more than 28% of gross income on housing costs and no more than 36% on total debts including housing. This calculator uses the 36% total debt ratio.
What debts count toward DTI?
Monthly debts include car payments, student loans, credit card minimum payments, child support, and any other recurring debt obligations.
Does this include property taxes and insurance?
This calculator estimates the principal and interest portion. Your actual affordable price may be lower when accounting for property taxes, homeowner's insurance, and PMI.