What is the 28/36 rule for house affordability?

The 28/36 rule says your housing payment should not exceed 28% of your gross monthly income, and your total monthly debts including housing should stay below 36%.

Can I afford a house with less than 20% down?

Yes, but you will likely pay private mortgage insurance (PMI) and a larger loan means higher interest. This calculator lets you include PMI to see the real cost.

House Affordability Calculator

Based on the standard 28/36 rule used by lenders.

Your Finances

Annual Income ($)

Monthly Debt Payments ($)

Down Payment ($)

Interest Rate (% per annum)

Loan Term (years)

yrs

Property Tax ($/year)

Home Insurance ($/year)

PMI (% of loan / year)

Affordable Home Price

—

Max Mortgage Loan

—

Monthly Principal & Interest

—

Down Payment

—

Debt Ratio Used

—

How affordability is calculated

Lenders use two limits:

Front-end (28%): your housing payment should not exceed 28% of gross monthly income.
Back-end (36%): housing plus all other debts should stay under 36% of gross monthly income.

The calculator takes the tighter of the two limits, subtracts property tax, insurance and PMI, and works backwards to find the maximum loan and home price you can afford.

House Affordability FAQ

What is the 28/36 rule?▶

The 28/36 rule is a budgeting guideline: no more than 28% of gross monthly income for housing, and no more than 36% for all debts combined. Many lenders use this rule when approving mortgages.

How can I afford a more expensive house?▶

Increase your down payment, pay down existing debts, lower your target interest rate, or extend the loan term. Each of these frees up room in your monthly budget for a bigger home.