How Much House Can I Afford Calculator
The 28/36 rule is the standard mortgage affordability guideline: housing costs should not exceed 28% of gross monthly income (front-end DTI), and total debt payments should not exceed 36% (back-end...
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📐 Formula
💡 Practical Example
$90,000 gross income, $500 monthly debt, $30,000 down payment, 6.75% rate, 30-year term. - Gross Monthly Income: $7,500. - Max Housing Payment (28% rule): $2,100/month. - Back-end DTI allows: $2,700 - $500 debt = $2,200 housing. - Conservative max: $2,100/month → Max Loan ~$316,000. - Max Affordable Home Price: $316,000 + $30,000 = $346,000.
📖 About How Much House Can I Afford Calculator
The 28/36 rule is the standard mortgage affordability guideline: housing costs should not exceed 28% of gross monthly income (front-end DTI), and total debt payments should not exceed 36% (back-end DTI).
To use the How Much House Can I Afford Calculator, enter your Gross Annual Household Income, Monthly Debt Payments (Car, Student Loan, etc.), Down Payment Available and other values. The calculator instantly computes Maximum Affordable Home Purchase Price, Maximum Monthly Housing Payment (PITI) and more. Results update in real time as you change any input — no submit button needed.
How to Use This Calculator
Enter your Gross Annual Household Income (e.g. 90000 in ), Monthly Debt Payments (Car, Student Loan, etc.) (e.g. 500 in /month), Down Payment Available (e.g. 30000 in ), Estimated Mortgage Interest Rate (e.g. 6.75 in %), and Loan Term — choose from options such as 30-Year Fixed, 20-Year Fixed, 15-Year Fixed. Results update instantly as you type — no submit button or page reload required. Adjust any value to compare scenarios side by side.
The Formula
Max Housing Payment = Gross Monthly Income × 28% (Front-End DTI Rule)
Max Total Debt = Gross Monthly Income × 36% (Back-End DTI Rule)
Max Loan = Max Monthly Payment × [(1 - (1+r)^-n) / r]
Worked Example
90,000 gross income, 500 monthly debt, 30,000 down payment, 6.75% rate, 30-year term.
- Gross Monthly Income: 7,
500.
- Max Housing Payment (28% rule): 2,100/month.
- Back-end DTI allows: 2,700 - 500 debt = 2,200 housing.
- Conservative max: 2,100/month → Max Loan ~316,
000.
- Max Affordable Home Price: 316,000 + 30,000 = 346,
000.
Understanding Your Result
Evaluate your result against the specific financial decision driving this calculation. Small input differences can create large output swings — run two or three scenarios (conservative, base, optimistic) to understand the range of outcomes. For decisions involving more than a month's income, validate your result against a second source or consult a certified financial planner (CFP) or CPA depending on the tax implications.
💡 Financial Planning: Expert Principles & Risk Awareness
- All calculations assume fixed rates and idealized conditions. Real-world results vary due to market volatility, inflation, fees, and taxes.
- The Consumer Financial Protection Bureau (CFPB) recommends consulting a certified financial planner (CFP) for decisions involving significant sums.
- Run at least three scenarios: optimistic, pessimistic, and most-likely — to understand the full range of potential outcomes before committing.
- Inflation averages 2–3% annually in the US (Federal Reserve target). Long-term projections that ignore inflation significantly overstate future purchasing power.
- Tax treatment varies widely by account type (IRA, 401k, brokerage), jurisdiction, and income level. Verify tax implications with a CPA before acting.
- Compound interest works for you in savings/investments and against you in debt. The difference of even 1% in rate, sustained over decades, is enormous.
- Emergency funds (3–6 months of expenses) should be established before optimizing for returns — financial security precedes financial growth.
- Financial projections older than 12 months should be recalculated. Interest rates, tax brackets, and market conditions shift materially year to year.
Results are for informational and educational purposes only. Always verify critical decisions with a qualified professional.