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NumberPond Do the math before you borrow.

How Much House Can I Afford?

Work backwards from your income using the 28/36 rule.

Trever Barney
By Trever Barney
Founder & Writer · About the author · Last reviewed 2026-08-25

A lender tells you the largest loan they are willing to make. That is not the same as the largest loan you should take. This calculator runs the standard 28/36 underwriting test on your actual numbers, then shows you what the result leaves out.

$
Before tax — lenders underwrite on gross income.
$
Car loans, student loans, credit card minimums, child support.
$
%
%
Of home value. Varies enormously by state.
$
$
%
%
Home price you can afford
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Max total housing payment
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Loan amount
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Resulting DTI
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Down payment is
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P = M · [ ((1+i)n − 1) / (i(1+i)n) ]
Enter your numbers to see the math.
This calculator produces estimates based on the assumptions you enter. It is not a loan offer, a pre-qualification, or a guarantee of terms. Your actual rate, payment, and costs are determined by a lender and will differ. Estimates exclude costs most mortgage calculators omit — maintenance, repairs, HOA special assessments, and utilities. Budget beyond the payment.

How affordability is actually calculated

This calculator works backwards. Instead of starting with a house price and finding a payment, it starts with the largest payment your income supports and finds the price that produces it.

Step 1 — find the allowed housing payment

front-end cap = 28% × gross monthly income
back-end cap  = 36% × gross monthly income − other debt payments
allowed housing payment = the lower of the two

For most people with car or student loans, the back-end test binds. That is why paying off a car loan can increase your buying power more than saving the same amount for a down payment.

Step 2 — strip out the non-loan costs

Property tax, insurance, HOA and PMI all come out of that allowed payment before any of it can go toward the loan itself.

Step 3 — solve the payment formula for principal

P = M · [ ((1+i)n − 1) / (i(1+i)n) ]

This is the standard mortgage payment formula rearranged. Add your down payment back on and you have a maximum purchase price.

One wrinkle the calculator handles that many do not: property tax is a percentage of the home price, so the tax depends on the answer and the answer depends on the tax. It resolves this by iterating until the number stops moving.

On the 43% DTI figure

You will see "43%" quoted constantly as the mortgage DTI limit. The history matters. A 43% total DTI was one of the underwriting requirements in the original General Qualified Mortgage definition. In December 2020 the CFPB finalised a rule replacing that flat DTI threshold with a pricing-based standard, with a mandatory compliance date of July 1, 2021. Meanwhile loans sold to Fannie Mae or Freddie Mac have generally been held to a DTI limit around 45%.

Practically: 43% is a useful mental reference point, not a wall. Above it, expect fewer lender options and a higher rate.

Frequently asked questions

What is the 28/36 rule?
The 28/36 rule is a long-standing underwriting guideline: spend no more than 28% of your gross monthly income on total housing costs (the front-end ratio), and no more than 36% on all debt payments combined including housing (the back-end ratio). Whichever limit is lower is the one that binds.
Is 43% debt-to-income a hard cutoff for a mortgage?
No, though it is often described that way. A 43% DTI limit was originally part of the General Qualified Mortgage definition. In its 2020 General QM Final Rule the CFPB replaced that flat DTI test with one based on loan pricing, effective 2021. Separately, loans eligible for purchase by Fannie Mae or Freddie Mac have generally applied a DTI limit around 45%. A DTI above 43% narrows your options and usually raises your rate rather than automatically disqualifying you.
Should I borrow the maximum I qualify for?
Qualifying and affording are different questions. Underwriting looks at gross income and the debts that appear on your credit report. It does not look at childcare, medical costs, retirement saving, commuting, or home maintenance — and borrowing your full approved maximum often leaves no room for them. Many buyers deliberately target a payment well below their approval.
Does the calculator account for property taxes rising with the price?
Yes. Property tax is charged as a percentage of home value, so the tax amount depends on the price you are solving for, which in turn depends on the tax. The calculator resolves this circular relationship by iterating to a stable answer rather than using a fixed tax estimate.

Sources

  1. What is a debt-to-income ratio? — Consumer Financial Protection Bureau · accessed 2026-08-25
  2. Ability-to-Repay and Qualified Mortgage Rule Assessment Report — Consumer Financial Protection Bureau · accessed 2026-08-25 · Source for the 43% General QM threshold and ~45% GSE limit
  3. CFPB Issues Two Final Rules to Promote Access to Responsible, Affordable Mortgage Credit — Consumer Financial Protection Bureau · 2020-12-10 · accessed 2026-08-25 · General QM Final Rule replacing the flat 43% DTI test
  4. Prepare to shop for a mortgage — Consumer Financial Protection Bureau · accessed 2026-08-25

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