How Much House Can I Afford?
This answers the question in the direction a lender does: it starts from your gross income and existing debts, applies the debt-to-income limits lenders conventionally use, and works back to the highest price those limits support. It is a different question from what a mortgage costs — that one starts with a price you already have in mind. Ratios differ between lenders and loan products, so treat the result as a realistic starting range rather than an amount you have been approved for.
The 28/36 rule is the common qualifying guideline for conforming conventional loans.
Your maximum price will appear here
Enter your gross income, existing debts, down payment and rate, then calculate.
Affordability Is Not a Mortgage Payment
These are two calculations pointing in opposite directions, and using the wrong one is the most common way people end up looking at the wrong houses.
Affordability works backwards. It starts from your income and debts, applies a limit, and produces a maximum price. You do not know the house yet. That is this page, and it is the one to run first.
A mortgage calculation works forwards. It starts from a specific price, rate and term, and produces the monthly payment. It presumes a house you have already found. That is the mortgage calculator.
The sequence matters. Run affordability first to get a ceiling, then take an actual listing price into the mortgage calculator to see what that specific house would cost each month. Doing it the other way round — finding a house, then checking whether the payment is affordable — means the anchor is set by the listing rather than by your finances.
One more distinction worth keeping straight: the maximum price this page returns is the most a lender’s ratios would support, not the amount you should spend. Those are rarely the same number, and the ratios take no view of your savings goals, your job security, or what you want the rest of your money for.
The Ratios Are Conventions, Not Approval Rules
The 28/36 figures, and the FHA and VA variants, are widely used guidelines. They are not laws, and no lender is bound by them.
Lenders set their own. Many will go above the back-end figure for a borrower with strong credit, substantial reserves or a large deposit. Others sit tighter. Automated underwriting systems weigh the whole file rather than applying one threshold, so two lenders can reach different answers on identical numbers.
The ratios ignore most of your finances. They look at gross income and recurring debt payments. They do not see childcare, medical costs, tax, retirement contributions, or that your income is variable. A price inside the ratios can still be uncomfortable in practice, which is why the calculator lets you set your own front and back-end percentages: entering something more conservative than 28/36 is a perfectly reasonable thing to do.
This is not a credit decision. A result here is arithmetic on the numbers you typed. It is not a pre-approval, not a pre-qualification, and not a commitment from anyone to lend you anything. Only a lender, having verified your income, credit and assets, can tell you what you can actually borrow — and this page is not financial advice about whether you should.
Which of our tools you actually want
House Affordability vs. our Mortgage Calculator: the Mortgage Calculator works out the monthly payment on a loan amount you already know. That is PMT. This page turns the question around and solves for PV instead: it begins with your income and your debts, then hunts for the highest price they support, along with the DTI ceilings lenders apply on the way.
Against our Loan-to-Value Calculator: LTV measures collateral risk, loan against value, at a price that is already settled. Affordability measures capacity, income against debt, to find a price in the first place. Banks run both tests side by side, which is why a house can clear the LTV check and still fail on DTI.
Against our Paycheck and salary tools: those convert gross to net for a single pay period. This calculator works on gross monthly income, exactly as lenders do. Your net pay matters enormously for whether the payment feels comfortable, but it is not the number the underwriting is based on.
Quick Answer
Two limits decide it and the lower one wins. Front-end caps housing costs at a share of gross monthly income, conventionally 28% (31% FHA). Back-end caps housing plus all other monthly debt, conventionally 36% (43% FHA, 41% VA). Subtract property tax, insurance, HOA and any mortgage insurance from that cap, and what remains buys a loan of PMT x ((1+i)^n - 1) / (i(1+i)^n). Add your down payment for the maximum price. Those percentages are lender conventions, not rules — individual lenders and loan programmes apply their own, and often stretch them for a strong credit profile.
How It Works: Formula & Variables
The two DTI ratios
front-end % = monthly housing costs / gross monthly income x 100
back-end % = (monthly housing costs + other recurring debts) / gross monthly income x 100
Monthly housing costs cover interest, principal, insurance, property taxes and any HOA or Co-Op fee. The CFPB describes the back-end version as all your monthly debt payments divided by your gross monthly income, which is the same thing said in fewer words.
Thresholds by loan type
| Loan type | Front-end | Back-end | Notes |
|---|---|---|---|
| Conventional | 28% | 36% | The commonly accepted guideline in the US and Canada, and a qualifying condition for conforming loans. |
| FHA | 31% | 43% | 33% and 45% on Energy Efficient Homes. A 1.75% upfront premium is charged on the loan amount. |
| VA | not used | better than 41% | A front-end test is not normally applied. |
| Custom | 10% to 50% | 10% to 50% | In 5% steps. Nothing above 50% is offered, since that is the point where DTI passes the risk threshold for nearly all mortgage lenders. |
On a conventional loan with less than 20% down, the calculator also folds in PMI at 0.5% a year. It is charged on the loan balance and it competes for the same monthly budget as your principal and interest, so leaving it out inflates the price you think you can reach.
From a monthly budget to a house price
PV = PMT x ((1+i)^n - 1) / (i(1+i)^n)
house price = PV + down payment
- PMT
- What is left each month for principal and interest, once tax, insurance, HOA and mortgage insurance come off your DTI cap.
- i
- Monthly rate, the annual rate divided by 100 and then by 12.
- n
- Term in months. A 30-year loan is 360.
- PV
- The loan that budget supports. Add your down payment to reach the price.
Worked Examples
Example 1: conventional, 28/36, 20% down
Gross income of $96,000 a year gives $8,000 a month. Other debts run to $500, a $350 car payment plus $150 on a student loan.
- Front-end cap: 28% of $8,000 = $2,240
- Back-end cap: 36% of $8,000 = $2,880, less $500 of debt = $2,380
- The binding limit is the lower of the two, so $2,240
- Property tax $300 and insurance $125 come off that, leaving $1,815 for principal and interest
- At 6.5% over 30 years the annuity factor is 158.21, so $1,815 x 158.21 gives a loan of about $287,150
- With 20% down: $287,150 / 0.80 = $358,900, needing roughly $71,800 in cash
No PMI here, since the down payment hits 20%. Worth noticing that the back-end test was never the problem in this case. Clearing the car loan would not raise the ceiling at all, because front-end is what is holding it down.
Example 2: FHA, 31/43, 3.5% down
Gross income of $60,000 a year is $5,000 a month, with $400 a month of other debt.
- Front-end cap: 31% of $5,000 = $1,550
- Back-end cap: 43% of $5,000 = $2,150, less $400 = $1,750
- Front-end binds again at $1,550
- Property tax $208 and insurance $100 come off, and annual MIP of 0.55% takes its share too, leaving about $1,158 for principal and interest
- $1,158 x 158.21 gives a loan of roughly $183,200
- At 3.5% down: $183,200 / 0.965 = $189,800, with about $6,640 in cash
- Plus a one-off FHA upfront premium of 1.75%, around $3,200 at closing
The smaller deposit is what makes FHA attractive on a lower income, and the mortgage insurance is the price of it. Both the monthly MIP and that upfront premium are real money, so budget for them rather than treating the 3.5% as the whole cash requirement.
Key Concepts
Only one limit is ever binding: lenders run both tests and take the lower answer. Knowing which one is holding you back tells you what to fix. If back-end binds, clearing a debt helps. If front-end binds, clearing debt changes nothing and you need more income or a bigger deposit.
Gross, not net: every ratio here uses income before tax. That is how underwriting works, so a calculator using take-home pay would tell you a smaller number than any lender would.
Mortgage insurance is part of the housing cost: PMI on a conventional loan and MIP on an FHA loan both sit inside the front-end ratio, competing with principal and interest for the same capped budget.
Qualifying and affording are different questions: these ratios describe what a lender will approve. Whether the payment leaves room for childcare, savings or a broken boiler is a separate matter, and the answer is often no at the maximum.
Buying in the UK? The 28/36 rule does not apply
There is no British equivalent of the 28/36 rule. What constrains lending instead is a loan-to-income flow limit set by the Bank of England and the PRA. Lenders may not write more than 15% of their new mortgages at a loan-to-income ratio of 4.5 or above. That 15% threshold is being suspended temporarily across 2025 and 2026 while the Bank reviews the rule, so the picture is genuinely in flux at the moment.
Stamp Duty is the other number that catches people out. For first-time buyers in England and Northern Ireland, from 1 April 2025: nothing on the first £300,000, then 5% on the portion between £300,001 and £500,000. Above £500,000 the relief disappears entirely and standard rates apply from the first pound, which makes the jump either side of that line unusually painful.
Switch the currency selector to GBP and the calculator shows your loan-to-income multiple and your first-time buyer stamp duty alongside the price.
If the number comes back lower than you hoped
The usual response is to stretch the term or hunt for a better rate, and both help a little. The bigger lever is normally the back-end ratio, because every monthly debt payment you clear frees the same amount for housing, pound for pound. A $350 car payment gone is $350 more of housing budget, which at the factor used above is roughly $55,000 of extra borrowing power.
Our Debt Payoff Calculator compares the snowball and avalanche methods and gives you a debt-free date, which is the most direct way to see how quickly that headroom could appear.
Common Mistakes
Using net income and not saying so: banks qualify on gross, same as this calculator. Plenty of tools quietly mix the two, which produces a number that matches nothing a lender will tell you.
Forgetting PMI below 20% down: it is a monthly cost inside the housing ratio, not an optional extra. Leave it out and the maximum price comes back too high.
Mixing up the two thresholds: 28 is housing only, 36 is everything. Applying the back-end percentage to housing alone will overstate what you can spend by a wide margin.
Missing which limit binds: the two caps rarely land in the same place, and the lower one is the only one that matters. Working on the wrong one is effort spent for nothing.
Frequently Asked Questions
It caps housing costs at 28% of your gross monthly income, and everything you owe each month at 36%. The first number is the front-end ratio, the second is the back-end ratio. Lenders in the US and Canada use it as a qualifying condition for conforming conventional loans, so it is the default setting on this calculator.
Front-end only counts housing: interest, principal, insurance, property taxes and any HOA or Co-Op fee, divided by your gross monthly income. Back-end takes that same housing figure and adds every other recurring monthly debt on top, then divides by the same income. The CFPB puts the back-end version plainly: your debt-to-income ratio is all your monthly debt payments divided by your gross monthly income.
FHA works to 31% front-end and 43% back-end. Both rise, to 33% and 45%, on Energy Efficient Homes. You can go above those numbers, but only with documented compensating factors that satisfy the lender.
VA looks for a back-end ratio better than 41%. There is normally no front-end test at all, which is why selecting VA in the calculator removes that row from the comparison.
Yes, if you are putting down less than 20% on a conventional loan. Private mortgage insurance protects the lender rather than you, and it is a real monthly cost that eats into the same budget your principal and interest come out of. This tool adds 0.5% a year automatically when your down payment falls below 20%.
The 28/36 rule does not exist in the UK. What limits things instead is a loan-to-income flow limit set by the Bank of England and the PRA: lenders cannot write more than 15% of their new mortgages at 4.5 times income or above. That 15% threshold is being switched off temporarily through 2025 and 2026 while the Bank reviews the rule. As a first-time buyer you also pay no Stamp Duty on the first £300,000, then 5% on the slice up to £500,000.
Related Calculators
Mortgage Calculator
The monthly payment on a loan amount you already know.
Loan-to-Value (LTV) Calculator
The collateral side of the same deal: loan against property value.
Debt Payoff Calculator
Clearing debt raises your back-end headroom. See how fast you could do it.
Paycheck Calculator
What actually lands in your account each pay period, after tax.
Amortization Calculator
The payment-by-payment schedule once you have picked a loan.
Got a price range? Price a specific house
Take a real listing price into the mortgage calculator to see the monthly payment, then the amortization calculator to see how much of the early years is interest rather than principal. If your deposit is near 20%, the loan-to-value calculator is worth a minute: crossing that line generally removes mortgage insurance, which changes the monthly figure more than a small difference in rate would.
Sources and assumptions
- Debt-to-income ratios: Consumer Financial Protection Bureau, What is a debt-to-income ratio?
- FHA qualifying ratios (31% and 43%): HUD Handbook 4155.1, section 4.F
- Mortgage insurance below 20% down: Consumer Financial Protection Bureau, What is private mortgage insurance?
- UK loan-to-income limits: Bank of England / PRA, review of the LTI flow limit rule
- Assumptions: a repayment mortgage at a fixed rate for the whole term; property tax, insurance, HOA and mortgage insurance as you enter them; and the standard present-value annuity formula to turn a monthly budget into a loan amount. Closing costs, moving costs and maintenance are not included, and they are real.
- Not a credit decision. This is an estimate from figures you supplied. It is not a pre-approval, not an offer of credit, and not financial advice.