Home Affordability Calculator 2026 — How Much House Can You Afford?

How to Use the Home Affordability Calculator

The 28/36 rule is a standard lender guideline: your housing costs should not exceed 28% of gross monthly income, and total debt payments (housing + other debts) should not exceed 36% of gross monthly income. This calculator applies both limits and uses the more restrictive one to determine your affordable home price.

Enter your annual household income, down payment percentage, monthly debt payments (car loans, student loans, credit cards), and current mortgage interest rate. The calculator computes your maximum affordable home price using a 30-year fixed-rate mortgage.

Data Sources & Methodology

Our Home Affordability Calculator uses the standard 28/36 DTI rule widely adopted by conventional mortgage lenders in the US. All guidelines are verified as of May 2026.

• 28/36 DTI Rule: Standard lending guideline from the Consumer Financial Protection Bureau. Front-end: 28% of gross income. Back-end: 36% including debt payments.
• Interest Rate Data: Current mortgage rate averages from Freddie Mac PMMS. Default assumes 6.5% for 30-year fixed.
• Property Tax: US average ~1.25% per Tax Policy Center. County-level rates vary significantly.

How We Calculate: Front-End DTI = Monthly Income × 28%. Back-End DTI = (Monthly Income × 36%) − Monthly Debts. The calculator uses the lower of the two limits. The affordable loan amount is derived by reversing the amortization formula: M = P × [r(1+r)ⁿ] ÷ [(1+r)ⁿ − 1]. Home Price = Loan Amount ÷ (1 − Down Payment %). Monthly payment includes principal, interest, and property taxes. This is an estimate — actual approval depends on lender criteria, credit score, and debt ratios.

Home Affordability Formula

Front-End DTI: Monthly Income × 28% = Max Housing Payment. Back-End DTI: (Monthly Income × 36%) − Monthly Debts = Max Payment. The calculator uses the lower of the two limits and reverses a standard amortization formula to determine the maximum principal affordable.

Frequently Asked Questions (FAQs)

Should I use the 28/36 rule or can I go higher?

The 28/36 rule is a conservative guideline used by most conventional lenders. FHA loans allow up to 31/43, and some lenders approve up to 50% DTI with strong credit (720+) and significant reserves. However, staying within 28/36 provides a comfortable margin for saving, investing, and unexpected expenses.

How does the down payment affect affordability?

A larger down payment reduces the loan amount, eliminates PMI (at 20%), and lowers monthly payments. A 20% down payment on a $400,000 home saves approximately $200-$300/month in PMI costs. However, putting down less than 20% is sometimes better if it means entering the market sooner in a rising price environment.

Does this include homeowners insurance and HOA fees?

No — this calculator covers principal, interest, and property taxes. Homeowners insurance typically adds $100-$200/month, and HOA fees can add $50-$500/month depending on the community. Factor these into your total monthly budget when evaluating actual affordability.