Mortgage Affordability Calculator by Income
How much house can you actually afford? Enter your income, debts, and down payment to see the maximum home price lenders will approve.
Understanding the 28/36 Rule
The 28/36 rule is a lending standard that survived the 2008 financial crisis. It says your housing payment should stay below 28% of gross monthly income, and total debt payments should stay below 36%. These thresholds keep your finances stable even if income dips or expenses rise.
On $80,000 annual income, that's $6,667 per month gross. The 28% limit caps housing at $1,867, and the 36% limit caps all debt at $2,400. If you already pay $500 in car and student loans, your mortgage payment can't exceed $1,900. The calculator automatically applies whichever limit is stricter.
Some lenders go higher—31% front-end and 43% back-end for borrowers with strong credit. This 'aggressive' option shows what you might get approved for, but it leaves less financial cushion. Consider your job stability, lifestyle costs, and future plans before maxing out.
Why You Shouldn't Buy the Maximum You Qualify For
Lenders calculate the maximum they'll let you borrow, not the amount that leaves you financially comfortable. A bank doesn't know you want to travel, save for kids' college, or retire early. They only care about the likelihood you'll make payments.
Real estate agents and sellers have an incentive to push you toward higher prices. More commission for the agent, more profit for the seller. Nobody in the transaction is incentivized to tell you to buy less house—except your future self.
A good rule of thumb: take the maximum this calculator shows and subtract 10-20%. That buffer gives you room for property tax increases, maintenance surprises, homeowners association fees, and lifestyle expenses that matter to you. You can always buy more house later, but you can't undo an overstretched mortgage.
How Down Payment and Debts Change Your Limit
Every $1,000 of down payment raises your affordable home price by roughly $1,000. If you can afford a $300,000 house with $20,000 down, adding another $10,000 to your down payment pushes your limit to $310,000. It's a direct, linear relationship.
Monthly debts work the opposite way. Every $100 in monthly debt payments reduces your home price limit by $20,000 to $25,000, depending on interest rates. Pay off a $400/month car loan before house shopping, and you might unlock $80,000 to $100,000 more buying power.
That's why many homebuyers aggressively pay down debt in the year before they shop. A $5,000 credit card balance costing $150/month might reduce your home price limit by $30,000. Paying it off could mean the difference between a decent starter home and your dream house.
Frequently Asked Questions
What is the 28/36 rule?
A guideline that says your housing payment should not exceed 28% of gross income and total debt should not exceed 36%. Lenders use these ratios to assess risk.
Can I afford more than this calculator says?
Some lenders approve higher amounts, especially with excellent credit or large down payments. But just because you qualify doesn't mean you should stretch your budget that far.
Should I max out my affordability?
No. This calculator shows the maximum lenders will approve, not what's comfortable for your lifestyle. Leave room for savings, retirement contributions, and unexpected expenses.
How does down payment affect affordability?
A larger down payment increases the home price you can afford because you're borrowing less. A $50,000 down payment might allow a $350,000 home, while $20,000 down might only stretch to $280,000.
What if I have student loans or car payments?
Include all monthly debt payments in the 'Monthly Debts' field. These reduce how much you can afford because they increase your debt-to-income ratio.