Based on the 28/36 rule — a common lender guideline
28% Rule (housing ≤ 28% of gross income):
36% Rule (total debt ≤ 36% of gross income):
Many U.S. lenders historically used a “front-end” and “back-end” debt-to-income (DTI) screen. The front-end guideline suggests housing costs (often PITI: principal, interest, taxes, and insurance) stay near or below 28% of gross monthly income. The back-end guideline suggests housing plus other recurring debts stay near or below 36% of gross monthly income.
This calculator takes the lower of those two housing caps, subtracts estimated monthly taxes and insurance, then back-solves the largest loan payment that fits. Adding your down payment produces an estimated maximum home price.
With $100,000 household income, $500 in other monthly debts, a $60,000 down payment, 7% rate, 30-year term, $3,000 taxes, and $1,200 insurance, the tool estimates how large a purchase price still keeps housing within the tighter of the 28% and 36% caps. If other debts are high, the 36% rule often becomes the binding constraint.
It remains a useful teaching rule of thumb. Many lenders focus more on total DTI and residual income, and programs differ. Treat 28/36 as a budgeting guardrail, not a guarantee of approval.
Usually no. Leaving room for maintenance, furniture, childcare, and rate shocks is wiser than stretching to the ceiling. Stress-test with a higher rate in our mortgage calculator.
Lenders may average two years of income and subtract certain write-offs. Enter a conservative income figure you expect underwriting to use.
Affordability answers “how much house fits my income.” Rent vs buy answers “which path builds more wealth under your assumptions.” Use both: Rent vs Buy calculator.