What is the 28/36 rule and how does this calculator use it?

The 28/36 rule is a guideline lenders use to determine how much house you can afford. The calculator uses both ratios: your housing payment (including mortgage, taxes, and insurance) shouldn't exceed 28% of your gross monthly income, and your total debt payments (including housing) shouldn't exceed 36%. The calculator adjusts these ratios based on your down payment, interest rate, and existing debts.

What's the difference between pre-approval and what this calculator shows?

This calculator shows what you can afford based on the 28/36 rule and your specific financial situation. A lender's pre-approval may give you a higher amount because lenders often qualify you for the maximum they're willing to lend, which can exceed what's financially prudent. The calculator helps you find a comfortable budget rather than just the maximum loan amount.

Should I include my partner's income when calculating home affordability?

Yes, if you're buying with a partner, include both incomes for a more accurate picture. However, consider whether you can afford the payments on one income if necessary. The calculator allows you to input combined income and debts, and you can toggle to see the impact of one income alone.

How do property taxes impact how much house I can afford?

Property taxes are a significant part of your monthly housing payment. The calculator allows you to input local property tax rates (typically 1-2% of home value annually). Higher property taxes reduce the mortgage payment you can afford, lowering your maximum home price. Always research property taxes in your desired area before using the calculator.

What about HOA fees? Do they count toward the 28% housing ratio?

Yes, HOA fees are included in your housing payment and count toward the 28% ratio. The calculator includes a field for monthly HOA fees, which can be significant ($200-500+ monthly for condos). This reduces the mortgage payment you can afford, potentially lowering your maximum home price.

What is PMI and how does it affect home affordability?

PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home's purchase price. The calculator includes PMI costs (typically 0.5-1% of the loan amount annually), which increases your monthly payment and reduces how much you can afford. The calculator shows the impact of different down payment percentages on your affordability.

How much should I have for an emergency fund after buying a home?

The calculator includes a recommendation to have 3-6 months of expenses in an emergency fund after purchase. Homeownership comes with unexpected expenses (repairs, maintenance, appliances). The calculator helps ensure you don't deplete your savings so much that you're at financial risk.

Can I use the calculator for different interest rate scenarios?

Yes, the calculator allows you to input different interest rates to see the impact on your affordable home price. You can compare current rates, potential future rates, and different loan types (30-year fixed, 15-year fixed, ARM). This helps you understand how rate changes affect your purchasing power.

What if my debt-to-income ratio is higher than 36%?

If your debt-to-income ratio exceeds 36%, the calculator will show reduced housing affordability. You can see the impact of paying down debts on your affordable home price. The calculator helps you identify how much debt reduction could increase your home-buying budget.

How do I account for future rate increases if I'm considering an ARM?

The calculator includes an ARM analysis that shows how your payment would change if rates increase. It can show the maximum potential payment at the adjustment cap and helps you determine if you could still afford the home if rates rise. This is crucial for responsible ARM planning.

Finance Tool

Home Affordability Calculator

Use the 28/36 rule to calculate the maximum home price and monthly mortgage payment you can comfortably afford.

Annual Gross Income ($)

Monthly Debts ($)

Interest Rate (%)

Loan Term (Years)

Down Payment ($)

Max Home Price

$256,221

Max Monthly Payment (28% Rule)

$1,367

How to use this calculator

1
Enter your details
Fill in the required fields on the left.
2
Review the results
See your calculated results on the right.

Frequently asked questions about Home Affordability Calculator

What is the 28/36 rule and how does this calculator use it?: The 28/36 rule is a guideline lenders use to determine how much house you can afford. The calculator uses both ratios: your housing payment (including mortgage, taxes, and insurance) shouldn't exceed 28% of your gross monthly income, and your total debt payments (including housing) shouldn't exceed 36%. The calculator adjusts these ratios based on your down payment, interest rate, and existing debts.
What's the difference between pre-approval and what this calculator shows?: This calculator shows what you can afford based on the 28/36 rule and your specific financial situation. A lender's pre-approval may give you a higher amount because lenders often qualify you for the maximum they're willing to lend, which can exceed what's financially prudent. The calculator helps you find a comfortable budget rather than just the maximum loan amount.
Should I include my partner's income when calculating home affordability?: Yes, if you're buying with a partner, include both incomes for a more accurate picture. However, consider whether you can afford the payments on one income if necessary. The calculator allows you to input combined income and debts, and you can toggle to see the impact of one income alone.
How do property taxes impact how much house I can afford?: Property taxes are a significant part of your monthly housing payment. The calculator allows you to input local property tax rates (typically 1-2% of home value annually). Higher property taxes reduce the mortgage payment you can afford, lowering your maximum home price. Always research property taxes in your desired area before using the calculator.
What about HOA fees? Do they count toward the 28% housing ratio?: Yes, HOA fees are included in your housing payment and count toward the 28% ratio. The calculator includes a field for monthly HOA fees, which can be significant ($200-500+ monthly for condos). This reduces the mortgage payment you can afford, potentially lowering your maximum home price.
What is PMI and how does it affect home affordability?: PMI (Private Mortgage Insurance) is required when your down payment is less than 20% of the home's purchase price. The calculator includes PMI costs (typically 0.5-1% of the loan amount annually), which increases your monthly payment and reduces how much you can afford. The calculator shows the impact of different down payment percentages on your affordability.
How much should I have for an emergency fund after buying a home?: The calculator includes a recommendation to have 3-6 months of expenses in an emergency fund after purchase. Homeownership comes with unexpected expenses (repairs, maintenance, appliances). The calculator helps ensure you don't deplete your savings so much that you're at financial risk.
Can I use the calculator for different interest rate scenarios?: Yes, the calculator allows you to input different interest rates to see the impact on your affordable home price. You can compare current rates, potential future rates, and different loan types (30-year fixed, 15-year fixed, ARM). This helps you understand how rate changes affect your purchasing power.
What if my debt-to-income ratio is higher than 36%?: If your debt-to-income ratio exceeds 36%, the calculator will show reduced housing affordability. You can see the impact of paying down debts on your affordable home price. The calculator helps you identify how much debt reduction could increase your home-buying budget.
How do I account for future rate increases if I'm considering an ARM?: The calculator includes an ARM analysis that shows how your payment would change if rates increase. It can show the maximum potential payment at the adjustment cap and helps you determine if you could still afford the home if rates rise. This is crucial for responsible ARM planning.

Compound Interest Calculator

Calculate how your investments grow over time with the power of compound interest.

Mortgage Payoff Calculator

See your monthly payment, total interest, and amortization for any mortgage.

Loan Calculator

Estimate monthly payments and total cost for any personal, auto, or student loan.

Embed this calculator on your site

Copy and paste this code into your website's HTML (WordPress, Webflow, custom HTML, etc.) to display this calculator.

<!-- CalculateAway Widget -->
<div class="calculateaway-embed" data-tool="home-affordability" style="width: 100%; max-width: 800px; margin: 0 auto;"></div>
<script src="https://calculateaway.com/api/widget" async></script>