Quick answer: A household earning $90,000 a year with $500 in monthly debts can typically afford a home around $392,000 with $60,000 down at 6.5% on a 30-year loan. Lenders use the 28/36 rule: housing at or under 28% of gross monthly income and all debts at or under 36%. Enter your numbers above for your exact price.
Last reviewed: October 2026
Key facts
- The 28/36 rule: spend at most 28% of gross monthly income on housing and 36% on all debts combined.
- Your affordable payment is the lower of the two caps, converted into a loan using your rate and term.
- A bigger down payment raises your price dollar for dollar without changing the loan you qualify for.
- The rule covers principal and interest; add property tax, insurance, and HOA to get your true housing cost.
A house affordability calculator applies the lender-standard 28/36 rule to your income, debts, down payment, rate, and term. It finds your maximum monthly housing payment, converts it into the largest loan you can carry, and adds your down payment to reveal the highest home price you can afford.
Knowing your real price range before you tour homes saves you from heartbreak and from stretching into a payment that squeezes everything else. The 28/36 rule is the same guideline most conventional lenders use when they pre-approve you, so the number this calculator gives is close to what a loan officer would quote. This free tool gives you an instant answer with no signup.
How to use the house affordability calculator
- Enter your gross annual income before taxes, including salary, bonuses, and steady side income.
- Enter your monthly debts: car payments, student loans, credit card minimums, and child support.
- Enter your down payment savings, the cash you will put down at closing.
- Enter the interest rate you expect and pick your loan term (30, 20, or 15 years).
- Click Calculate to see your maximum monthly payment and the highest home price you can afford.
House affordability calculator formula: the 28/36 rule
Lenders apply two tests. The front-end ratio caps your housing payment at 28% of gross monthly income. The back-end ratio caps your housing payment plus all other monthly debts at 36% of gross monthly income. Your affordable payment is whichever cap is lower, because both tests must pass. The calculator then converts that monthly payment into a loan amount with the standard mortgage formula: loan = payment x (1 - (1 + r)^-n) / r, where r is the monthly rate and n is the number of payments. Finally, it adds your down payment, since price = loan + down payment.
Note that lenders define "housing payment" as PITI: principal, interest, property tax, and homeowners insurance, plus HOA dues. This calculator works with principal and interest only, which is the standard way affordability calculators frame the question. To be conservative, subtract your estimated monthly tax and insurance from the result, or treat the output as your P&I budget and shop with that in mind.
Worked examples
Example 1: $90,000 income, $500 debts, $60,000 down
Monthly income = 90,000 / 12 = $7,500. Front-end cap = 0.28 x 7,500 = $2,100. Back-end cap = 0.36 x 7,500 - 500 = $2,200. The affordable payment is the lower cap: $2,100. With r = 0.065/12 = 0.0054167 and n = 360, the loan factor (1 - (1.0054167)^-360) / 0.0054167 = 158.21. Max loan = 2,100 x 158.21 = $332,243. Add the down payment: 332,243 + 60,000 = $392,243 maximum home price.
Example 2: $150,000 income, $800 debts, $100,000 down
Monthly income = 150,000 / 12 = $12,500. Front-end cap = 0.28 x 12,500 = $3,500. Back-end cap = 0.36 x 12,500 - 800 = $3,700. Affordable payment = $3,500. With r = 0.06/12 = 0.005 and n = 360, the loan factor = 166.79. Max loan = 3,500 x 166.79 = $583,771. Home price = 583,771 + 100,000 = $683,771.
Qualifying ratio reference table
| Loan type | Front-end ratio | Back-end ratio | Notes |
|---|---|---|---|
| Conventional | 28% | 36% | The standard 28/36 rule this calculator uses |
| FHA | 31% | 43% | More generous; popular with first-time buyers |
| VA | No fixed cap | 41% | Uses residual income test instead of front-end cap |
| USDA | 29% | 41% | For eligible rural properties, zero down payment |
| Jumbo | 28-33% | 36-43% | Varies by lender; stricter documentation |
Tips to raise your affordable home price
- Pay down monthly debts first. Every $100 of monthly debt you eliminate frees roughly $16,000-$17,000 of loan at 6.5% over 30 years, because the back-end cap is often the binding one.
- Grow the down payment. Each extra dollar of down payment adds a full dollar to your affordable price, and 20% down also avoids private mortgage insurance (PMI).
- Improve your credit score. A higher score can earn a lower rate; even 0.5% less interest meaningfully raises the loan the same payment supports.
- Consider a longer term carefully. A 30-year term qualifies you for more than a 15-year term, but you pay far more interest over time.
- Count all stable income. Lenders accept documented bonuses, overtime history, and rental income, which raise both caps.
Common mistakes
- Forgetting taxes and insurance. PITI can run 20-40% above principal and interest in high-tax states; budget for the full payment, not just the calculator output.
- Using net instead of gross income. Lenders use pre-tax gross income, so entering take-home pay understates what you can afford.
- Ignoring the back-end cap. Car and student loan payments often bind before the 28% front-end cap does.
- Treating the max as a target. Qualifying for a price does not mean it fits your lifestyle; leave room for savings, repairs, and life.
- Shopping before pre-approval. Rates and programs change what you qualify for; the calculator is a guide, not a commitment.
Frequently asked questions
What is the 28/36 rule for buying a house?
The 28/36 rule says your housing payment should not exceed 28% of your gross monthly income (front-end ratio), and your housing payment plus all other debts should not exceed 36% (back-end ratio). It is the standard guideline conventional lenders use to judge affordability.
How much house can I afford on $100,000 a year?
With no other debts, 28% of $8,333 monthly income gives a $2,333 payment, which supports about a $369,000 loan at 6.5% over 30 years. Add your down payment to get your price. With $60,000 down, that is roughly $429,000. Use the calculator above with your exact debts and rate.
Does the 28/36 rule include property taxes and insurance?
Yes, lenders count the full PITI payment: principal, interest, property tax, and homeowners insurance, plus HOA dues. This calculator works with principal and interest only, so subtract your estimated tax and insurance from the result for a conservative target.
Can I afford a house with a 50% debt-to-income ratio?
Conventional loans cap the back-end ratio around 36-45% depending on the program, and FHA allows up to about 43-50% with strong compensating factors. A 50% ratio leaves little room for savings or surprises, so most buyers are safer well below it.
How does my down payment change what I can afford?
Dollar for dollar: the loan you qualify for stays the same, but your affordable price rises by the full down payment amount. A larger down payment can also remove PMI and sometimes earn a slightly better rate.
Which limit binds first: the 28% housing cap or the 36% total-debt cap?
Whichever is lower for your debts. On $100,000 a year ($8,333 a month) with $500 of other monthly debts, the housing cap is 28% x $8,333 = $2,333, while the total-debt cap leaves 36% x $8,333 - $500 = $2,500 for housing, so the 28% cap binds. Other debts above about $667 a month flip it: then the 36% cap becomes the tighter limit and your affordable price falls.
Should I buy at the maximum price the calculator allows?
Not necessarily: the maximum is a lender ceiling, not a comfort recommendation. On $90,000 a year ($7,500 a month), the 28% cap allows $2,100 a month for housing, while a more comfortable 25% cap allows $1,875, a $225-a-month buffer for maintenance, repairs and savings. Many calculators show both a standard and a conservative price for exactly this reason; buy near the comfortable figure if your budget is tight elsewhere.
Sources
- Consumer Financial Protection Bureau (CFPB): home-buying tools and guidance on mortgage affordability
- CFPB Ask CFPB: how interest rates and APR differ when comparing loan costs
Key takeaways
- Bookmark this tool to recheck affordability whenever your income, debts, or rates change.
- The 28/36 rule sets two caps; your payment is the lower one.
- On $90,000 income with $500 in debts and $60,000 down at 6.5%, you can afford about $392,000.
- Down payments raise your price dollar for dollar; paying off debts raises the loan you qualify for.
- Budget for PITI, not just principal and interest, before you fall in love with a house.
Comments
Leave a comment