Before you start searching for homes, use this home affordability calculator to find out how much house you can realistically afford based on your income, existing debts, and down payment. Our calculator uses the same debt-to-income guidelines that mortgage lenders use to qualify borrowers.

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How to Use the Home Affordability Calculator

Enter your annual gross income — your household income before taxes. If you’re buying with a partner, include both incomes. Next, enter your total monthly debt payments — the minimum payments on car loans, student loans, credit cards, and any other recurring debt obligations. Do not include rent (it goes away when you buy) or utilities.

Enter your available down payment. A larger down payment reduces the loan amount, lowers the monthly payment, and may eliminate PMI. Enter the current interest rate you’d qualify for — check with a lender or bank for a personalized estimate, or use current national averages as a benchmark. The calculator also accounts for property taxes and insurance in its affordability assessment.

The calculator applies the 28/36 rule — the most widely used mortgage qualification guideline. The “28” means your monthly housing payment (PITI) should not exceed 28% of gross monthly income. The “36” means your total monthly debt payments (housing plus all other debts) should not exceed 36% of gross monthly income. Some loan programs are more flexible (FHA allows up to 43% DTI), but 28/36 is the conventional standard.

Understanding Your Affordability Results

The calculator shows the maximum home price you can qualify for under standard lending guidelines, along with the corresponding monthly PITI payment. It’s important to note that what you can afford and what you should spend are different questions. Lenders approve you for the maximum they’re willing to lend — that doesn’t mean you should borrow that much.

Many financial advisors recommend keeping your mortgage payment (PITI) well below the 28% front-end ratio — targeting 20–25% instead. This leaves more room in your budget for savings, retirement contributions, unexpected expenses, and general quality of life. Buying at the absolute top of your affordability range is a recipe for being “house poor” — technically affording the payment but having little left for anything else.

Frequently Asked Questions

What is the 28/36 rule for mortgage affordability?

The 28/36 rule states that your monthly housing costs (principal, interest, taxes, and insurance — PITI) should not exceed 28% of your gross monthly income (front-end ratio), and your total monthly debt obligations should not exceed 36% of gross income (back-end ratio or DTI). These are guidelines used by conventional mortgage lenders to assess affordability. FHA loans allow higher ratios (up to 43% DTI), and some lenders make exceptions for strong compensating factors like large down payments or excellent credit.

How much income do I need to buy a $400,000 house?

Using the 28% front-end guideline, your monthly PITI payment should not exceed 28% of gross income. On a $400,000 home with 20% down ($80,000), a 30-year mortgage at 7%, plus estimated taxes and insurance, the PITI is approximately $2,400–$2,700/month. To keep this within 28% of income, you’d need a gross monthly income of at least $8,570–$9,640 ($103,000–$116,000 annually). With a smaller down payment, PMI increases the payment and required income.

Does my credit score affect how much house I can afford?

Significantly. Your credit score determines your mortgage interest rate, which directly affects your monthly payment and maximum loan amount. A score of 760+ typically qualifies for the best rates; a score of 640 might result in a rate 1.5–2% higher. On a $350,000 loan, a 2% higher rate adds about $400/month to your payment and $143,000 to your total interest paid over 30 years.

What’s the difference between pre-qualification and pre-approval?

Pre-qualification is a quick, informal estimate of how much you might be able to borrow based on self-reported information — useful for early planning but carries no weight with sellers. Pre-approval is a formal process where the lender verifies your income, assets, employment, and credit, then issues a conditional commitment to lend up to a specified amount. In a competitive real estate market, sellers won’t seriously consider offers without a pre-approval letter.

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