How this calculator works
Front-end limit: housing costs (principal, interest, property tax and insurance) should stay under 28% of gross monthly income.
Back-end limit: housing plus all other debt payments should stay under 36%. The calculator uses whichever limit is lower.
It then works backward from that payment to a home price, given your down payment, rate, term and the yearly cost of tax and insurance as a share of price.
Lenders may approve more, especially for government-backed loans, but the 28/36 rule leaves room for savings and repairs.
Worked example
$110,000 income, $600 of monthly debts, $60,000 down, 6.5% for 30 years
- 28% limit: $2,567 a month. 36% limit after debts: $2,700. The lower, $2,567, is used.
- Working backward with 1.6% for tax and insurance gives a price of about $385,000.
- That is a loan of about $325,000.
Questions people ask
What is the 28/36 rule?
Spend no more than 28% of gross income on housing and no more than 36% on all debt payments combined. It is a guideline, not a law.
How much should I put down?
20% avoids PMI on conventional loans, but many buyers put down 3% to 10%. A larger down payment lowers the payment and interest.
Does my credit score affect affordability?
Yes: a higher score usually means a lower rate, which raises the price you can afford for the same payment.
Sources
Last reviewed October 2, 2026