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How Much House Can I Afford?

This runs the affordability question in the direction a lender does: it starts with your gross income and your existing debts, applies the front-end and back-end DTI limits, and works back to the highest price those limits support.

What You Can Afford
Start from your income and debts, and work back to a price

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.

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 your housing costs at a share of gross monthly income (28% conventional, 31% FHA). Back-end caps housing plus every other monthly debt (36% conventional, 43% FHA, 41% VA). Subtract taxes, insurance, HOA and any mortgage insurance from that cap, and whatever is left buys a loan of PMT x ((1+i)^n - 1) / (i(1+i)^n). Add your down payment and you have your maximum price.

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
Conventional28%36%The commonly accepted guideline in the US and Canada, and a qualifying condition for conforming loans.
FHA31%43%33% and 45% on Energy Efficient Homes. A 1.75% upfront premium is charged on the loan amount.
VAnot usedbetter than 41%A front-end test is not normally applied.
Custom10% 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.
Last reviewed 2026-07-28. For educational purposes only — not professional advice.

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.

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