About Affordability
'How much house can I afford?' has a lender's answer (the most they'll approve) and a budget's answer (what leaves room to live) — the 28/36 rule sketches the first and, used honestly, disciplines the second. Its virtue is symmetry: high existing debts shrink the house budget through the 36% side, which is exactly how it should work.
Enter income, monthly debt payments, saved down payment, and today's rate. You get the binding cap, the monthly housing budget, and the estimated price — with the taxes-and-insurance assumption on the table instead of under it.
Once a price is real, the full payment breakdown lives in the Mortgage Calculator.
The 28/36 Math
Two caps, the tighter one wins, then a price:
Cap A = 28% × monthly gross income Cap B = 36% × monthly gross − existing debts Budget = min(A, B) → ~80% to P&I → loan via amortization + down payment
Worked example: $90,000 income with $400 of debts and $40,000 down at 6.5%/30y — the 28% cap binds at $2,100/month, ~$1,680 of it P&I, supporting a ~$266,000 loan → roughly a $306,000 price. Doubling the debts to $800 flips the binding cap to 36% and cuts the price by ~$60k.
Income vs Price
Ballpark prices at 6.5%/30 years with modest debts and 10% down — computed by this calculator's method:
| Household income | Housing budget (28%) | ≈ Affordable price |
|---|---|---|
| $60,000 | $1,400/mo | ≈ $200,000 |
| $90,000 | $2,100/mo | ≈ $306,000 |
| $120,000 | $2,800/mo | ≈ $410,000 |
| $160,000 | $3,733/mo | ≈ $545,000 |
| $200,000 | $4,667/mo | ≈ $680,000 |
Rate sensitivity is brutal at every row: the same $90k income affords ~$60,000 more house at 5.5% than at 6.5% — rates move budgets more than raises do.
Beyond the Ratios
What 28/36 doesn't see: childcare (often rent-sized), income stability, retirement contributions you refuse to sacrifice, and the ownership costs beyond the payment — maintenance runs ~1% of value yearly, plus HOA, utilities, and the furniture the bigger house demands. Many happy owners deliberately buy below their approval; almost no one regrets the margin.
The lender-side fine print: actual underwriting uses DTI limits that can stretch past 36% (some programs into the 40s) with strong credit and reserves — which is why pre-approvals often exceed this calculator. That's the maximum-loan answer, not the good-life answer; the 28/36 output is deliberately the conservative one. Property taxes are the wildcard: at high-tax rates the 20% T&I assumption understates, shaving real price capacity.