Mortgage Affordability Calculator
Work forward from your income the way an underwriter does: a housing budget under the 28/36 guideline, the loan that budget supports, and the price that follows.
On this page
How lenders think about affordability
An underwriter does not start from a home price — they start from your income and work forward. The conventional guideline caps housing at 28% of gross monthly income, and housing plus every other debt payment at 36%. Whichever cap you hit first is your housing budget. Property tax and insurance come out of that budget, because the lender counts them as housing cost; what remains is the principal-and-interest payment a loan can be sized against.
This calculator walks the same path and shows every step: two budgets, the one that binds, the loan the leftover payment supports at your rate and term, and the price once your down payment is added.
A worked example
Income of $96,000 — $8,000 a month — with $500 of monthly debts, $40,000 down, 6.5% for 30 years, and $450 a month estimated for taxes and insurance.
The 28% cap allows $2,240 for housing. The 36% cap allows $2,880 minus the $500 of debts — $2,380. The housing cap binds at $2,240; taxes and insurance take it to $1,790 for principal and interest; at 6.5% over 30 years that supports a loan of about $283,000; with the down payment, a price around $323,000.
Now watch the debts: raise them to $1,000 a month and the 36% cap binds instead ($1,880), cutting the price by roughly $57,000. Nothing about income changed. For most buyers near the margin, existing debt payments move the answer more than anything except the interest rate.
What moves the number most
- The rate. At $1,790 a month, moving from 6.5% to 5.5% supports roughly $32,000 more loan. Affordability is rate-sensitive in a way that surprises people used to thinking in prices.
- Monthly debts. Every $100 of monthly debt payments removes about $15,800 of loan at 6.5% over 30 years, once the back-end cap binds.
- The down payment adds to the price dollar for dollar — and, at 20% or more of the result, avoids PMI, which this model does not charge.
- Taxes and insurance. High-tax locations shrink the loan the same budget supports, which is why identical incomes afford very different houses in different counties.
Approved is not the same as comfortable
The guideline uses gross income; your budget runs on take-home pay. A payment at the edge of the 28% cap routinely exceeds a third of net income before utilities, maintenance, or saving anything. Take the result here, run it through the mortgage calculator for the full payment, and compare that against the figure from the take-home pay calculator — the three pages together give the honest picture.
What this does not cover
- PMI. A down payment under 20% of the resulting price normally adds mortgage insurance, reducing what the same budget affords.
- The tax-and-insurance circularity. Those costs really scale with the price, but this model takes them as a flat estimate. Refine the estimate as you narrow the price range.
- Closing costs — typically a few percent of the price, needed in cash beyond the down payment.
- Program variations. FHA, VA, and portfolio programs qualify at different ratios than 28/36.
See our methodology for how these tools are built and tested.
Frequently asked questions
Is the 28/36 rule actually used by lenders?
As a starting guideline, yes — it has anchored conventional underwriting for decades. In practice, automated underwriting weighs the whole file, and approvals happen above those ratios with strong credit, reserves, or other compensating factors.
The guideline's real value to a buyer is as a conservative planning bound, not a prediction of any one lender's decision.
Why does my rent not appear in the debts field?
Because the mortgage replaces it. The calculation builds a housing budget from scratch; entering rent as a debt would count housing twice and understate what you can afford.
Should I use my income before or after taxes?
Before — the guideline is defined on gross income, and that is how a lender will compute it. Just remember the consequence: the resulting payment will feel larger against your take-home pay than the percentages suggest.
How do I estimate taxes and insurance for a house I haven't found?
Work from your target area. County assessor sites publish property tax rates, and a rough starting point is the area's typical rate applied to your expected price range, plus a homeowners premium quote for the area. Revisit the estimate once you are looking at real listings — it is the roughest input on this page.
Does a bigger down payment always mean I can afford a bigger house?
It raises the price dollar for dollar, but the loan — set by your monthly budget — stays the same size. Its larger effect is often crossing the 20% line, which removes PMI and frees real monthly budget. Cash reserves matter too: a down payment that empties your emergency fund makes the whole purchase more fragile, not less.
Related calculators
This calculator is provided for general educational and estimation purposes only. It does not constitute financial or lending advice, and it is not a pre-approval or a qualification decision. Lenders weigh credit, assets, employment, and the property alongside these ratios, and individual programs set their own limits.