Enter your gross annual income, monthly debt payments, down payment amount, mortgage interest rate, and loan term. The calculator uses the 28/36 rule — a widely accepted lending guideline — to determine the maximum home price you can afford.

The 28% rule limits your housing costs (mortgage + taxes + insurance) to 28% of gross monthly income. The 36% rule limits your total debt payments (housing + car loans + student loans + credit cards) to 36% of gross income. The calculator shows you both limits and which is the binding constraint.

Determining how much house you can afford involves more than just qualifying for a mortgage. Lenders will approve you for the maximum amount based on debt-to-income ratios, but that doesn't mean you should borrow the maximum. A comfortable housing budget leaves room for savings, emergencies, and lifestyle.

The 28/36 Rule Explained

The front-end ratio (28%) measures housing costs as a percentage of gross income. This includes your mortgage principal and interest, property taxes, homeowner's insurance, and HOA fees. The back-end ratio (36%) adds all other recurring debt payments — car loans, student loans, credit card minimums, and personal loans.

Conservative vs. Aggressive Budgeting

Financial advisors often recommend a more conservative approach: keeping housing costs at 25% or less of gross income — or even better, 25% of take-home pay. This provides a larger buffer for unexpected expenses, retirement savings, and lifestyle spending.

What Lenders Actually Look At

Beyond DTI ratios, lenders evaluate your credit score (affects your rate), employment history (prefer 2+ years at the same employer), cash reserves (2-6 months of payments), and the loan-to-value ratio (LTV). A strong profile across all these factors can sometimes qualify you for DTI ratios above 36%.