The question that keeps first-time buyers up at night
How Much House Can I Afford?
Punch in your income and debts. We'll tell you the truth — even if it's not what you want to hear. 😅 Uses the 28/36 rule — the same formula lenders use.
Cal says: Pro move: figure out what you can afford BEFORE you fall in love with a house. Your heart will thank your wallet later.
🤔 The million-dollar question (maybe literally): Banks use the to decide how much money they'll trust you with. This calculator uses the exact same math to find your . Think of it as a financial reality check — but a friendly one.
Be honest — the calculator won't judge you. Hover the ⓘ icons for plain-English explanations.
$269,032
based on the 28% rule — this is your ceiling
Comfortable
$228,677
Still have a life
Max Affordable
$269,032
The official limit
Stretch
$295,935
Hope you like ramen
Monthly Breakdown (at Max Price)
Mortgage (P&I)
$1,448
Property Tax
$269
Home Insurance
$150
Total Housing Cost
$1,867
Three price ranges — pick your comfort level
🔢 Got a price range? Let's get specific.
Now that you know what you can afford, plug a specific home price into our Mortgage Calculator to see your exact monthly payment, amortization schedule, and total interest.
Open Mortgage Calculator →This is the formula banks actually use. Now you know their secret:
Max housing: $1,867/month
(28% × $6,667 monthly income)
Max for housing after debts: $2,000/month
(36% × $6,667 − $400 existing debts)
We use the stricter of the two (28% rule) because that's what a responsible lender does. And we're responsible. Mostly.
Slay your debts first. Every $300/month in debt you eliminate adds roughly $50K–$80K to your buying power. That car payment might be costing you a bedroom.
Stack that down payment. A bigger down payment directly increases what you can afford AND may kill PMI. Double win.
Buff your credit score. Higher score → lower rate → more home for the same monthly payment. It's the ultimate life hack for home buying.
Go long on the term. A 30-year term has lower monthly payments than 15, which means a higher max price. The trade-off: you pay more interest total. But hey, you can always pay extra.
Can I actually buy more than the "max affordable" amount?
Technically, yes — some banks will approve you for more. But just because you CAN doesn't mean you SHOULD. Being "house poor" (gorgeous house, empty fridge) is a real thing. We recommend the "Comfortable" range if you enjoy things like vacations and eating out.
What if I'm self-employed?
Use your net income (after business expenses). Fair warning: lenders will want 2 years of tax returns and will scrutinize every deduction. That home office write-off? It just lowered your borrowing power. The irony is real.
Gross income or net — which do I use?
Banks use gross (pre-tax). That's what this calculator uses too. But here's the thing: your actual take-home is lower, so the "Comfortable" range is probably closer to what feels right in real life.
What about closing costs?
Ah yes, the surprise at the finish line. Budget 2–5% of the home price for closing costs ON TOP of your down payment. On a $300K home, that's $6K–$15K extra. Nobody warns you about this, so we just did. You're welcome.
The Difference Between What You Can Afford and What a Bank Will Lend You
Here's the dirty little secret of the mortgage industry: lenders will almost always pre-approve you for more than you should actually spend. That's not a conspiracy — it's just math from their side of the table. The bank is looking at whether you can technically make the minimum payment on paper. They aren't asking whether you'll still be able to take vacations, max out your 401(k), eat at restaurants without doing math at the table, or absorb a surprise $4,000 transmission repair without panicking. That part is on you.
A useful rule of thumb: take whatever the bank pre-approves you for, then aim for a home priced 15–25% below that ceiling. You'll thank yourself the first time the water heater dies on a Sunday night, or the first time you realize that "starter home in a great school district" also comes with a $9,000 annual property tax bill that nobody mentioned in the listing.
The technical word for "I'm spending too much on my house" is house poor. It describes the situation where you technically own a beautiful home but can't afford to do anything in it because every spare dollar is going to the mortgage company. Avoid this. It's a special kind of misery.
The 28/36 Rule, Translated Into Plain English
The 28/36 rule is the industry's classic affordability shorthand, and it's been around since before most of us could pronounce "amortization." It says two things at once:
The 28% part (front-end ratio)
Your total monthly housing payment — principal, interest, property taxes, homeowner's insurance, PMI, and HOA dues — should not exceed 28% of your gross monthly income (gross = before taxes). On a $90,000 salary ($7,500/month), that caps housing at about $2,100/month.
The 36% part (back-end ratio)
Your total monthly debt — housing PLUS car loans, student loans, credit card minimums, child support, etc. — should not exceed 36% of your gross monthly income. Same $7,500/month income? That's a $2,700 ceiling for everything you owe each month.
Why these specific numbers? They originated as a bank's way of saying "borrowers who stay under these ratios rarely default." Modern lenders sometimes stretch DTI (debt-to-income) up to 43% or even 50% for strong borrowers, but the original 28/36 numbers are still the safest target if your goal is sleeping well at night and not Googling "how to pause a mortgage payment" at 2am.
One more nuance: the 28% number assumes a fairly normal cost of living. If you live somewhere with brutal property taxes (looking at you, New Jersey, Illinois, Texas) or punishing insurance premiums (Florida, coastal California), even hitting 28% on housing might leave you cash-strapped. Conversely, if you're in a low-tax state with cheap utilities, you might safely stretch a little higher.
The Costs Buyers Always Forget
The mortgage payment is just the headline number. Here's what the calculator doesn't include — and what wrecks first-year budgets across the country:
Property taxes (varies wildly)
Anywhere from 0.3% of home value per year (Hawaii) to 2.2% (New Jersey). On a $400k home in NJ, that's $733/month — more than some people's car payments. Always check the county assessor's site before making an offer.
Homeowner's insurance
$100–$300/month depending on location, home value, and how prone your area is to hurricanes, wildfires, hailstorms, or aggressive raccoons. Florida and California buyers should expect to pay multiples of the national average.
PMI (if down payment < 20%)
0.3–1.5% of the loan per year. On a $300k loan, that's $75–$375/month — every month, until you reach 20% equity. PMI doesn't protect you; it protects the lender. You just pay for it.
HOA fees
If you're buying a condo or planned community, this can be anywhere from $50 to $1,000+/month. Always ask before falling in love with the place. And ask if there are any pending special assessments — those are surprise bills HOAs hand owners for big repairs.
Maintenance & repairs
Rule of thumb: budget 1% of the home's value per year. New roofs ($10k+), HVAC systems ($8k+), and water heaters ($1.5k+) don't last forever. A house is essentially a slowly depreciating machine you live inside.
Utilities
Houses cost more to heat and cool than apartments. Expect electric, gas, water, sewer, and trash to run $200–$500/month. Older homes with poor insulation can blow past that in winter.
Furniture and 'first-time buyer syndrome'
Most new owners spend $5,000–$15,000 in the first year on furniture, blinds, lawn equipment, paint, and 'oh, I guess I need that too.' Build a buffer.
What "Affordable" Looks Like at Different Incomes
These are rough ballpark numbers assuming a 7% interest rate, 20% down payment, and minimal other debt. Your real number will differ based on your local property taxes, insurance, and existing debts — but they're useful for calibrating expectations before you fall in love with Zillow.
| Annual Income | Comfortable Home Price | Stretch Price |
|---|---|---|
| $60,000 | $200,000 | $260,000 |
| $80,000 | $270,000 | $345,000 |
| $100,000 | $340,000 | $430,000 |
| $125,000 | $425,000 | $540,000 |
| $150,000 | $510,000 | $650,000 |
| $200,000 | $680,000 | $870,000 |
"Comfortable" follows the 28/36 rule. "Stretch" pushes DTI toward 43% — technically allowed by most lenders, but financially tight.
Three Affordability Mistakes to Avoid
1. Treating the pre-approval letter as a target
The pre-approval is a maximum, not a recommendation. The bank will happily approve you for a payment that consumes half your take-home pay. Treat that number like a credit card limit: just because it exists doesn't mean you should hit it.
2. Forgetting that two incomes can become one
If you're buying with a partner, ask: could we still pay this mortgage on one income? Job loss, parental leave, illness, or career changes happen. A mortgage that requires both paychecks every single month is a fragile mortgage.
3. Underestimating "lifestyle creep" that comes with a bigger home
A bigger house means more rooms to furnish, more lawn to maintain, more square feet to heat, and more stuff to fill it with. People consistently underestimate how much their non-housing spending goes up when they move into a larger place.
Frequently Asked Questions
Should I include my spouse's income?
Only if your spouse will actually be on the mortgage application. If only one of you is on the loan, the lender only counts that person's income — but they'll also only count that person's debts. Sometimes leaving a partner with bad credit off the application gets you a better rate.
Does the calculator account for student loans?
Yes — anything you put in the 'monthly debts' box gets factored in. Include the minimum required payment, even if you're paying more voluntarily. For income-driven repayment plans, lenders often use 0.5%–1% of the total balance instead of your actual payment.
What if I'm self-employed?
Lenders typically want to see 2 years of tax returns and average your net (post-deduction) income. Self-employed buyers often qualify for less than they expect because they aggressively deduct expenses to lower their taxable income. Consider getting pre-approved early in your buying process.
Should I use my gross or net income?
Always gross (before taxes) — that's what lenders use. If you want a more conservative estimate based on actual take-home pay, just use your net income in the calculator instead. The math doesn't care; only the resulting number does.
How much should I keep in savings after closing?
At least 3–6 months of mortgage payments as a true emergency fund, separate from your down payment money. Lenders may even require some 'reserves' depending on your loan type — they want proof you can keep paying if something goes sideways.
What if I expect a big raise next year?
Don't borrow against income you don't have yet. Buy based on your current income. If the raise comes through, fantastic — you'll have extra room in your budget instead of a mortgage you can't afford right now.
Does buying a home help me build wealth?
Generally yes, but slowly. Real estate appreciates around 3–5%/year on average, and your monthly payment builds equity over time. The wealth-building only works if you stay long enough (5+ years) to outweigh the upfront costs of buying and selling.
Cal says: My honest take: if your monthly housing cost feels even a little stressful on paper, it's going to feel a LOT stressful in real life. Buy below your max — future-you will high-five present-you.