House Affordability Calculator: How Much House Can You Really Carry?
"How much house can I afford?" is the real question. "How much will the bank lend me?" is the wrong one. Banks approve amounts that leave families eating instant noodles in a beautiful kitchen. What matters is what a house costs to carry, month after month, alongside the rest of your life. This calculator works from your income and debts to a price you can hold comfortably, using the same ratios lenders use, explained plainly enough to bend where your life requires it.
The 28/36 rule, in plain English
Lenders judge you with two fractions. The front-end ratio says housing costs (mortgage principal and interest, property tax, homeowner's insurance, and HOA dues) shouldn't exceed 28% of your gross monthly income. The back-end ratio says ALL your monthly debts (housing plus car payments, student loans, minimum card payments) shouldn't exceed 36%. Whichever limit is tighter is your ceiling. They're guidelines, not laws of physics, but generations of defaults are baked into them, so exceeding them should be a deliberate decision.
A worked example: a $95,000 salary
- Gross monthly income: $95,000 ÷ 12 = $7,916.67.
- Front-end limit: 28% × $7,916.67 = $2,216.67 a month for all housing costs.
- Back-end limit: 36% × $7,916.67 = $2,850. With $450 a month of car and card payments, housing gets what's left: $2,850 − $450 = $2,400. The front-end is tighter, so $2,216.67 is the budget.
- Subtract tax and insurance: budget roughly $390 a month for property tax and homeowner's insurance (this swings hugely by state and city, so check your area). That leaves $1,826.67 for principal and interest.
- Turn payment into a loan: at 6.75% over 30 years, $1,826.67 a month supports a loan of about $281,633.
- Add the down payment: with $40,000 down, the price you can carry is roughly $321,633. That's the honest ceiling, not the $450,000 a loan officer might cheerfully approve.
The debts lever: notice what the $450 of monthly debts did. Through the back-end ratio it shrank the housing budget. Paying off a $250 car payment before house-hunting frees $250 a month, and it can also raise your qualifying price by tens of thousands. Run this calculator both ways before deciding what to pay off first.
What the ratios don't see (but you must)
- Maintenance is real: budget roughly 1% of the home's value per year for repairs. Roofs and furnaces don't care about your ratios.
- Closing costs: typically 2 to 5% of the price, in cash, on top of the down payment. Many first-time buyers are ambushed here.
- Your actual life: childcare, a long commute, irregular income, or a plan to start a business all argue for staying under the ceiling.
- Rate sensitivity: at these sizes, a single percentage point of interest rate moves the affordable price by roughly a tenth. Shopping two or three lenders is the highest-paid hour of the whole purchase.
- Utilities and HOA dues scale with the house: a bigger home costs more to heat, cool, insure and maintain, and an HOA can add the price of a car payment. Ask the seller for real utility averages. They're allowed to tell you, and the honest ones will.
- The emergency fund survives the purchase: if buying the house empties every account, the first broken water heater goes on a credit card, and the affordability math collapses.
Same salary. Same house hunt. Different state, different answer.
Property tax is the stealth variable in this whole calculation, because it isn't a percentage point of anything you control. It's set by where the house happens to sit, and it ranges from under 0.4% of value per year in the lowest-tax states to well over 2% in the highest. Take our $95,000 earner, holding insurance at $150 a month in both cases: in a state taxing at 0.6%, the tax bill on the target home runs about $161 a month, leaving $1,905.85 for principal and interest, enough for a $293,842 loan and a home around $333,842. In a state taxing at 2.1%, the tax bill is about $563 a month, the loan shrinks to $231,856, and the affordable home falls to roughly $271,856.
Same income, same debts, same down payment, same interest rate. The tax line alone produces a $62,000 difference in what the same family can afford. That's why national "you can afford X times your salary" rules are worthless, and why this calculator wants your local numbers before it gives you a price.
A second household, run end to end
Now a different shape of life: two incomes totaling $130,000, a $380 student loan payment and a $240 car payment ($620 a month of debts), and a 10% down payment saved.
- Gross monthly income: $130,000 ÷ 12 = $10,833.33.
- Front-end limit: 28% × $10,833.33 = $3,033.33 a month for all housing costs.
- Back-end check: 36% allows $3,900 for everything; minus the $620 of debts leaves $3,280. The front-end limit is tighter, so $3,033.33 is the budget.
- Subtract tax and insurance: at $520 a month, a mid-tax area this time, $2,513.33 remains for principal and interest.
- Turn payment into a loan: at 6.75% over 30 years, that payment supports a loan of about $387,502.
- Add the down payment: with 10% down, the loan is 90% of the price, so the home is roughly $430,558 and the down payment itself is about $43,056. Check the savings actually cover that plus closing costs before falling for a listing.
Two incomes bought a bigger house, and they also changed which constraint binds. The down payment, not the salary, became the figure worth verifying twice. Run your own household both ways in the calculator above; the binding constraint is often a surprise.
Rerun it at a rate one point higher
Affordability answers expire fast, because rates move. Drag our original $95,000 earner through the same math at 7.75% instead of 6.75%, one point higher, well within a single year's mood swing. The housing budget doesn't change: it's still $2,216.67, still leaving $1,826.67 for principal and interest. But that payment now supports a loan of only about $254,975 (roughly $26,658 less house), with the same salary, the same debts and the same $40,000 down. Nothing about the family changed; the price of money did. It's why serious buyers get a fresh quote the week they start touring homes rather than the month before, and why a rate lock carries real value once you're under contract. Rerunning the calculator takes thirty seconds; the mortgage it describes lasts thirty years.
Buyers wave the pre-approval letter like a verdict. That letter is the lender's estimate, built from the lender's ratios. It is not a promise to lend, and it knows nothing about your childcare costs, your irregular income or the savings you swore you'd keep. Carry your own ceiling from this calculator into every viewing, written down. When it and the letter disagree, yours is the one that has to live in the house.
Frequently asked questions
How much income do I need for a $400,000 house?
Working the 28% rule backwards with typical tax and insurance and 20% down, you're looking at roughly $105,000 to $115,000 a year, depending heavily on local property taxes and your other debts. Put your own numbers into the calculator above. Your tax rate and debts move the answer more than the salary does.
Is the 28/36 rule outdated?
It's a guardrail. Some lenders approve back-end ratios well above 36%, and in high-cost cities plenty of careful households run hotter than 28% on housing. The rule's real value is forcing the question: if you're above it, you should know exactly why and what you're giving up.
How much should I put down?
Twenty percent avoids private mortgage insurance and lowers the payment meaningfully. But draining everything to reach 20% is risky; many buyers are safer with 10 to 15% down and cash reserves intact. Compare both cases in the calculator, including the PMI cost, before deciding.
Do lenders use gross or net income?
Gross: your pay before taxes and deductions, which is why approvals feel generous compared with your actual take-home. For your own planning, sanity-check the resulting payment against your net income and real monthly spending.
Should I include my partner's income?
If they'll be on the loan and the deed, yes, lenders will. If you're buying solo but living together, decide deliberately: qualifying on one income and treating the second as cushion is the conservative play, and it leaves room for life's interruptions.
Related calculators: Mortgage Calculator, Rent Calculator and Debt Ratio Calculator.
Once the budget ceiling is clear, the payment itself is the next question. Mortgage and loan guides wait on the CalcMega Blog.
Estimates only. Lender guidelines and local taxes vary. Nothing here is financial advice.
The ratios used here match the ones in the CFPB guide to owning a home, which also covers the costs beyond the mortgage itself.