Home Affordability Calculator
Based on the 28/36 debt-to-income rule
Find out exactly how much house you can afford based on your income, existing debt, and today's mortgage rates. No sign-up. Runs entirely in your browser.
Based on the 28/36 debt-to-income rule
The 28/36 rule — the standard lenders use to evaluate your mortgage application — says your housing payment should stay under 28% of your gross monthly income, and total debt under 36%. These are approval thresholds, not lifestyle guidelines. Just because you qualify for a certain mortgage doesn't mean that payment will feel comfortable when paired with groceries, childcare, car repairs, and retirement savings.
Many financial planners recommend a more conservative 25% rule: keep housing to 25% of take-home (after-tax) pay rather than gross income. On a $75,000 salary, that's roughly $1,200 per month rather than the $1,750 the 28% rule allows. At 6.36% over 30 years, that difference is roughly a $50,000 swing in maximum home price.
Mortgage rates have eased considerably from their 2024 peak. At 6.36% (Freddie Mac, May 2026), monthly payments are meaningfully lower than at 7.5% — a $300,000 mortgage at today's rate runs about $1,872 per month versus $2,097 at 7.5%. That is $225 per month in real purchasing power returned to the buyer. However, home prices in most markets have not dropped to fully offset rate relief. Inventory remains tight, and the affordability squeeze has shifted rather than resolved.
Standard wisdom is "put 20% down to avoid PMI." That is sound advice, but worth running the math both ways. PMI typically costs 0.5–1% of the loan value annually — roughly $100–$250 per month on a $250,000 loan. If saving that extra 10% takes two to three more years of market exposure, the opportunity cost may exceed what you would pay in PMI, especially in a rising market. FHA loans allow 3.5% down with competitive rates, and many state programs offer down payment assistance that does not appear in standard calculator outputs.
This calculator outputs principal and interest only. To get a realistic all-in monthly cost, add:
Adding these back typically increases the monthly cost by $400–$1,000 versus the calculator output. Use your calculator number as the mortgage payment budget, not the total housing budget.
The output from this calculator is your pre-approval estimate using standard ratios. Use it to set a realistic price band before you start shopping. Knowing you qualify for $340,000 but are comfortable at $300,000 is information you need before you fall in love with a $380,000 house. The math works best when it is done in advance of the emotional investment.