How Much House Can I Afford?
Enter your income, monthly debts, expected rate and down payment, and this calculator estimates the maximum home price you can afford — using the 28/36 rule that lenders base their decisions on. It works in any currency.
The 28/36 rule, explained
Lenders decide how much you can borrow mainly from your debt-to-income ratio. The classic guideline is the 28/36 rule:
- 28% — the front-end ratio: your total housing payment (mortgage principal + interest, and often taxes and insurance) should not exceed 28% of your gross monthly income.
- 36% — the back-end ratio: all your monthly debt payments combined — housing plus car loans, student loans and credit-card minimums — should not exceed 36% of gross income.
The calculator above uses whichever limit is lower for your situation, then works backwards from that maximum payment to the loan it supports at your rate and term, and finally to the home price (adding your down payment back in).
What actually moves your number
- Income and existing debts set the ceiling — paying down a car loan or card balance before you apply can lift your budget more than a raise.
- The interest rate matters enormously: at a higher rate the same payment buys a much smaller loan, so affordability falls as rates rise.
- The down payment raises the price you can reach for a given loan and, above 20% in many markets, removes mortgage insurance.
- Term — a longer term lowers the monthly payment (raising the max price) but costs far more interest over time.
Worked example
On $8,000/month gross income with $500 of existing debt payments, a 6.5% rate over 30 years and 20% down: the 28% cap allows about a $2,240 housing payment, which supports roughly a $354,000 mortgage — a home of about $443,000 once your down payment is added. Change any input above to see your own figure.
Does this work outside the US?
Yes — the principle is universal, only the caps change. Many lenders outside the US work to a total debt-to-income (sometimes called FOIR) limit of roughly 40–50% rather than 28/36, and down-payment minimums vary. Use the calculator with your local mortgage rate, and treat the percentages as your lender's rules rather than a fixed law. For a payment in your own currency and local rates, open your country's mortgage calculator.
Frequently Asked Questions
What is the 28/36 rule?
Spend no more than 28% of gross monthly income on housing and no more than 36% on total debt including the mortgage. Lenders use similar debt-to-income limits to size your loan.
Should I borrow the maximum I can afford?
Usually not. The maximum is a ceiling, not a target — property taxes, insurance, maintenance and rate rises push your real cost above the mortgage payment, so borrowing below the max leaves a safety margin.
Why did my budget fall when rates rose?
Your maximum payment is fixed by your income, but at a higher rate more of each payment is interest, so the same payment supports a smaller loan — and a smaller house.
See your real monthly payment
Once you have a target price, use the full mortgage calculator with your country's rates to see the exact payment and total interest.
Open the mortgage calculator →Related calculators
Sources
The 28/36 rule is a widely used lender guideline for debt-to-income limits; actual limits vary by lender, loan program and country. Figures are estimates, not a loan offer — confirm with a lender. See our methodology and editorial policy.