Home Affordability Calculator

The 28/36 rule is a lending guideline used by most mortgage lenders. It states that your total housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income, and your total debt obligations (housing + all other debts) should stay below 36%. This calculator uses both limits and takes the more conservative result to determine the maximum home price you can reasonably afford.

Existing debts directly reduce your purchasing power. For example, a $500/month car payment on a $75K salary lowers the maximum housing payment from about $2,250 down to roughly $1,750 under the 36% total-debt limit. That can reduce your affordable home price by $50K–$80K. Paying off debts before buying can significantly increase how much you qualify for.

A 20% down payment eliminates PMI and gives you immediate equity, but going beyond 20% is a trade-off. A larger down payment lowers your monthly payment and total interest. However, it also reduces your cash reserves. Financial advisors generally recommend keeping 3–6 months of expenses in an emergency fund after closing. If you can do that and still put down more than 20%, the extra equity can be worth it.