How Much House Can You Afford?
Enter your gross monthly income, down payment, mortgage rate, and loan term to find your maximum home price using the 28% income rule.
Most lenders cap your mortgage payment at 28% of gross income — but conservative buyers target 25% of take-home pay.
28%
of gross monthly income — the standard maximum mortgage payment guideline
20%
minimum down payment to avoid PMI and reduce your monthly payment
3–4×
annual salary — the conservative home price multiplier most advisors recommend
What really determines your buying power
The 28% rule is a ceiling, not a target
Lenders will often approve you up to 28–31% of gross income, but that does not mean you should spend that much. Buying at maximum affordability leaves no room for a rate rise, job loss, or major home repair. Most financial advisors recommend keeping your mortgage under 25% of net (take-home) income.
Rate changes have a huge impact
A 1% rise in mortgage rates reduces your buying power by roughly 10%. At 6%, a $2,000/month budget buys about $333,000 in loan. At 7%, the same payment only supports $300,000. Run the calculator at your current rate and 1–2% higher to understand your rate sensitivity.
Hidden costs beyond the mortgage
Property taxes (0.5–2.5% of value per year), homeowners insurance ($1,200–$3,000/year), HOA fees, maintenance (budget 1% of home value annually), and closing costs (2–5%) all add to the true cost of homeownership. Factor these in before committing to a price point.
How the House Affordability Calculator Works
The calculator applies the 28% front-end ratio: your maximum monthly mortgage payment is 28% of your gross monthly income. It then uses the standard mortgage payment formula to back-calculate the maximum loan amount that fits within that payment at your chosen rate and term. Adding your down payment gives the maximum home price.
This is a starting point, not a final answer. Actual lender approvals depend on your credit score, debt-to-income ratio, employment history, and the specific property. Use this number as a planning guide and consult a mortgage broker for a pre-approval figure.