savingcalculators

House Affordability Calculator: 28/36 Rule

Use this house affordability calculator to find the maximum home price you can afford under the lender-standard 28/36 rule. The same housing affordability calculator formula banks use, with your real income, debts, and down payment.

$
$
$
%
%
Max home price$0
Max monthly PITI$0
Comfortable (28% rule)$0
Stretched (36% rule)$0
Advertisement  ·  728 × 90

How this calculator works

The classic affordability test is the 28/36 rule: housing payments (PITI = principal + interest + tax + insurance) should be no more than 28% of gross monthly income, and total debt payments including housing no more than 36%.

PITI = (loan × r / (1−(1+r)−n)) + (home × tax_rate / 12)
max_home = max_loan + down_payment
PITI
Principal + Interest + Taxes + Insurance — the four components of a monthly mortgage payment
r
Monthly mortgage rate (APR / 12)
n
Loan term in months
tax_rate
Annual property tax + insurance as a % of home value (1–2.5% typical)

The 28/36 rule is conservative. Lenders may approve higher debt-to-income ratios (up to 50% for FHA loans), but borrowing the max almost always leaves you "house poor" — every other goal pauses.

Source: The 28/36 rule originated with Fannie Mae underwriting guidelines. See also CFPB Owning a Home.

FAQ

Why does this say less than what my bank pre-approved?
Lenders are paid on loan volume; they approve to the maximum DTI ratio they're allowed (50%+ for many FHA loans). The 28/36 rule is the conservative consumer-side recommendation. Borrowing the lender's max leaves no margin for car repairs, medical bills, job loss, or retirement saving.
What about PMI?
If your down payment is under 20% of the home price, expect Private Mortgage Insurance (PMI) of roughly 0.5–1.0% of the loan per year — about $80–$160/month per $100K borrowed. This calculator doesn't model PMI; subtract that monthly cost from the 'max PITI' figure to be safe.
How much house can I afford on my salary?
Standard rule of thumb: 2.5-3× gross annual income. So a $80,000 salary = $200K-$240K home. The 28/36 rule constrains further: housing under 28% of gross monthly income, total debt under 36%.
What is the 28/36 rule for buying a house?
Front-end: monthly housing (mortgage + tax + insurance + HOA) shouldn't exceed 28% of gross monthly income. Back-end: total monthly debt shouldn't exceed 36%. Most lenders enforce 36% strictly; FHA allows up to 43% with compensating factors.
How much do I need for a down payment?
Conventional: 5-20% (PMI required below 20%). FHA: 3.5% with 580+ credit. VA: 0% with eligibility. USDA rural: 0% with location/income eligibility. 20% down avoids PMI ($100-300/month) but 5-10% is realistic for most first-time buyers.
How much do I need to make to afford a $400,000 house?
Roughly $100,000-$130,000 gross annual income, depending on down payment and existing debts. With 20% down, 6.5% rate, and $400/month tax + insurance, monthly PITI runs $2,400. To stay under the 28% rule, you need ~$103K/year. Add a $400 car payment and you need closer to $130K.
Advertisement  ·  728 × 90

Related calculators

Learn more on the blog

Advertisement  ·  responsive horizontal