House Affordability Calculator
House affordability estimates how much home you can responsibly finance based on the standard 28/36 debt-to-income guideline lenders use: no more than 28% of gross monthly income toward housing, and no more than 36% toward total debt including housing. Toolverge applies whichever cap is more restrictive, then works backward through the loan-payment formula to estimate a maximum loan amount and, adding your down payment, a maximum home price.
Educational estimate only. Results are not medical, legal, or financial advice. Confirm important decisions with a qualified professional.
How it works
- Enter your annual income, existing monthly debts, and planned down payment.
- Enter an expected interest rate and loan term.
- Read your max monthly housing payment, max loan amount, and max affordable home price.
Formula maxHousingPayment = min(28% × grossMonthlyIncome, 36% × grossMonthlyIncome − monthlyDebts); loan solved from payment formula; maxPrice = loan + downPayment
Frequently asked questions
What is the 28/36 rule?
It is a common mortgage-underwriting guideline: housing costs should not exceed 28% of gross monthly income, and total debt payments (including housing) should not exceed 36%.
Why does this calculator use the smaller of the two caps?
Existing debts can make the 36% total-debt cap more restrictive than the 28% housing-only cap. Lenders use whichever limit is tighter, so this calculator does the same.
Does a higher down payment increase my max home price?
Yes, the down payment is added directly to the maximum loan amount you qualify for, so a larger down payment raises the max home price by the same amount.
Does this include property tax and insurance in the payment cap?
No, this estimate treats the 28%/36% caps as principal-and-interest capacity for simplicity; use the Mortgage Calculator to add tax, insurance, and HOA to a specific price.
Is this the same as loan pre-approval?
No. It is a planning estimate; actual pre-approval depends on your lender's full underwriting, credit score, and documentation.