How this affordability calculator works
If you are running this at 11 at night with a listing open in the next tab, welcome; that is when most people do. Buying a home, especially a first one, is exciting and terrifying in roughly equal parts, and the question underneath it all is simple: how much house can I actually afford? The trouble is that the phrase hides two different questions. What a lender will approve is one number. What you can carry comfortably, with room left for repairs and retirement and a life, is another, and on ordinary incomes the two sit $100,000 or more apart. Most calculators quietly answer the first question while wearing the label of the second.
So this one shows you three numbers side by side, each labeled with whose number it is. The comfortable price comes from the classic 28/36 rule, the planning convention that has kept budgets breathable for decades. The stretched price uses 36% of income for housing and 43% for total debts, the qualified-mortgage flavored middle ground. And the lender maximum runs the back-end ratio up to about 50%, which is what automated underwriting will genuinely approve for a strong file. That last number is what gets approved, not what feels good to live with, and the page says so right on it. All three are solved the same honest way: your monthly allowance is split into principal and interest, property tax, insurance, PMI when your down payment is under 20%, and HOA dues, and the maximum price is the one where the pieces add back to your allowance exactly.
The formula
Allowance = loan × payment factor + price × (tax% + insurance%) / 12 + PMI + HOA, solved for price
The front and back percentages are the tier caps: 28/36 comfortable, 36/43 stretched, about 50/50 at the lender maximum. The payment factor is the standard amortization payment per dollar borrowed at your rate and term. Because principal and interest scale with the loan while taxes and insurance scale with the price, the whole equation is linear in price and solves exactly; when the implied down payment falls under 20%, PMI at an assumed 0.6% of the loan per year joins the equation and it is re-solved in that regime. The result plugs back to the penny, and the calculator shows you the check.
Worked example
A household earning $95,000 a year with $500 a month of debt payments and $40,000 saved, at 6.95% (the Freddie Mac 30 year average as of September 17, 2026) over 30 years, with tax and insurance left at the defaults.
Gross monthly income is $7,916.67. The comfortable allowance is the smaller of 28% of gross ($2,216.67) and 36% of gross minus debts ($2,350), so the housing cap binds at $2,216.67 a month. Working that backwards through the rate, taxes, insurance, and PMI (the $40,000 lands under 20% down at this price) gives a comfortable price of about $296,000. The check: $1,694.13 principal and interest + $271.27 tax + $123.30 insurance + $127.97 PMI = $2,216.67, the allowance to the penny.
The same income and debts pushed to the lender maximum support a price of about $443,000 at exactly 50% total debt-to-income. That is $146,894 more house than the comfortable answer, from the same paycheck. Both numbers are true. They answer different questions.
And the rate matters more than it feels like it should: at 5.95% the comfortable price rises to about $317,000, and at 7.95% it falls to about $277,000. One point on the rate is worth roughly $19,000 of house here, which would take about a $7,000 annual raise to buy back. On a 15 year term the same budget carries about $240,000, a smaller house that is yours twice as fast.
Where the 28/36 rule comes from, and what it protects
The 28/36 rule is not a law and never was. It is an underwriting convention that hardened over decades of ordinary lending, from mid-century mortgage guidelines through the standards Fannie Mae and Freddie Mac carried for conventional loans, and it survived because the households inside it kept paying their mortgages through recessions, roof failures, and new babies. The front number caps the house itself; the back number is the one with wisdom in it, because it counts the car loan and the student loans against the same paycheck the mortgage draws from. Whichever cap you hit first is the one that binds, which is why two households with identical salaries can afford very different houses: the one without a $450 car payment simply has more month left.
Lenders will go well past it, and it is worth understanding why without any villains in the story. A lender's approval model answers one question: is this loan likely to be repaid? At a 45 or 50% debt-to-income ratio, with a good credit score and steady income, the honest statistical answer is usually yes, because people protect their homes fiercely and cut everything else first. That is exactly the problem. The approval math already assumes the vacations, the retirement contributions, and the restaurant budget are the flexible part. Nobody is misleading you when they approve the bigger number; they are just answering their question, not yours.
The income trap: qualified on gross, living on net
Every ratio on this page runs on gross income, because that is how lending works. But no one gets paid gross. On the worked example's $95,000, the comfortable allowance of $2,216.67 is 28% of gross; after federal tax, payroll tax, and a modest 401(k) contribution, take-home is closer to $5,800 a month, and the very same payment is nearly 40% of what actually lands in the account. That is the quiet reason a technically comfortable payment can feel tight by the 20th of the month. Before you commit to any number this page shows you, run your real paycheck through the take-home pay calculator and look at the payment as a share of that figure instead.
What this model leaves out, on purpose
Three real costs are deliberately not in the monthly math, and you should budget for them separately. Closing costs run about 2 to 6% of the price in cash on top of your down payment; the closing cost calculator prices them for your situation. Maintenance runs about 1% of the home's value per year as a planning figure, some years zero and some years a roof. Utilities are usually higher than in a rental because there is simply more home to heat. And one bigger question sits behind this whole page: whether to put that down payment into a house at all, rather than leaving it invested while you rent. That is a genuinely close call at 2026 rates, and it is exactly what our rent vs buy calculator was built to answer honestly. This page tells you how much house the budget carries; that page tells you whether buying is the right use of the money. They are better together.
When you are ready to look at one specific house rather than a ceiling, the mortgage calculator prices its exact monthly payment, the amortization calculator shows where each payment goes over the years, and the debt-to-income calculator shows the ratios a lender will compute from your file.
PMI is not a punishment
If your down payment is under 20% of the price, the lender adds private mortgage insurance, typically 0.3 to 1.5% of the loan per year depending on your credit score and loan type; this page assumes 0.6% and says so on every result that includes it. PMI insures the lender against default, not you against anything, which makes it easy to resent. The kinder frame is that it is the price of buying years earlier than saving a full 20% would allow, and in a rising market those years can be worth far more than the premiums. It is also temporary: on conventional loans you can request cancellation at 20% equity and it must end automatically at 22%. The calculator handles the 20% line exactly, including the odd case where your budget lands right on it, where one more dollar of house would switch PMI on across the entire loan.