How Much House Can You
Actually Afford?

How to use this calculator

This calculator uses two standard lending guidelines to estimate your comfortable purchase price: the 28% rule (your housing payment should not exceed 28% of gross monthly income) and the 36% rule (all debt payments combined should not exceed 36%). It accounts for all four components of your monthly payment: principal, interest, property taxes, and insurance.

• 1
  Enter your household income
  Use your gross combined income before taxes. For variable income, use a conservative estimate, such as your base salary plus a portion of your average bonus or commission.
• 2
  Add your existing monthly debt payments
  Include minimum payments on student loans, car loans, and credit cards. Do not include rent since that goes away when you buy.
• 3
  Set a realistic down payment
  Enter what you actually have available, not what you are targeting. The calculator will flag if you are below 20% and explain the PMI implications.
• 4
  Adjust the mortgage rate
  Use a current rate, which you can get from any lender or mortgage rate comparison site. Even a half-point difference changes the numbers meaningfully.

How to interpret your results

• Lender approval and financial comfort are not the same thing.A lender may approve you for more than this calculator suggests. That is because lenders look at your ability to repay, not your broader financial goals like retirement savings, kids' college, or emergency reserves. What you qualify for and what makes sense for your plan are two different questions.
• The 28% rule is a ceiling, not a target.Just because you can spend 28% of your income on housing does not mean you should. If you have high student loans, a variable income, or aggressive savings goals, keeping housing costs at 20 to 22% of income gives you much more breathing room.
• Property taxes and insurance matter more than people think.On a $600,000 home with a 1.2% property tax rate, taxes alone add $600 a month to your payment. Many buyers calculate principal and interest and forget this. The total payment including taxes, insurance, and any HOA fees is what you actually pay.
• PMI is a real cost that deserves attention.If your down payment is below 20%, you will likely pay Private Mortgage Insurance, typically between 0.5% and 1% of the loan amount per year. On a $500,000 loan, that is $2,500 to $5,000 annually until you reach 20% equity. It is not permanent, but it adds up.
• Run the numbers before you fall in love with a house.Once you have an emotional attachment to a property, it is hard to walk away even if the numbers do not work. Use this tool before you start shopping so you know your range going in.

Common mistakes to avoid

• Using pre-approval as a budget.Pre-approval tells you the maximum a lender will lend you. It does not tell you what payment fits your actual financial life. Treat it as a ceiling, and use your own budget analysis to set a floor.
• Forgetting closing costs.Closing costs typically run 2 to 4% of the purchase price. On a $500,000 home, that is $10,000 to $20,000. If that money is coming from your down payment fund, your effective down payment is smaller than you planned.
• Not accounting for ongoing maintenance.Homeownership comes with costs beyond the mortgage: repairs, appliances, landscaping, and unexpected issues. A common rule is budgeting 1% of the home value per year for maintenance. On a $500,000 home, that is $5,000 annually.
• Assuming two incomes will always be two incomes.If one partner takes time off for kids, changes careers, or loses a job, can you afford the payment on one income? It is worth stress-testing your budget against that scenario before you commit.
• Not comparing renting to buying.Buying is not always the better financial decision. In high-cost markets, renting and investing the difference can outperform ownership, especially if you might move within five years. The math is worth running.