Quick comparison
| Housing DTI guideline | ~28% of gross income |
|---|---|
| Total DTI guideline | ~36% of gross income |
| Includes in payment | PITI + PMI + HOA (as entered) |
| Still budget separately | Maintenance, utilities, moving |
| Best use | Set a ceiling before house hunting |
The 28/36 rule explained
Lenders commonly use the 28/36 rule: your total housing payment should stay under about 28% of your gross monthly income, and your total debt payments (housing plus car loans, student loans, and credit cards) should stay under 36%. Some loan programs allow higher DTI with compensating factors, but stretching to the underwriting maximum is how buyers become house-poor. Our affordability calculator works backward from a target debt-to-income ratio to estimate the highest home price that keeps you within a comfortable range.
Beyond the monthly payment
Affordability is about more than qualifying for a loan. Remember to budget for closing costs, moving expenses, maintenance (often about 1% of the home's value per year), utilities, and an emergency fund. Buying near the top of your approval leaves little room for rate changes, repairs, or life events, so many households target a payment below the lender’s maximum.
How to use this calculator effectively
Start with take-home realities, not just gross income rules. Enter debts accurately, then stress-test a higher interest rate and higher insurance quote. If the affordable price collapses under a 1% rate bump, narrow your search now rather than after you are emotionally attached to a listing. Pair this tool with a state calculator when taxes and insurance differ sharply from national defaults.
Income, debts, and pre-approval
Self-employed borrowers, recent job changes, and variable overtime need extra documentation — the calculator cannot see underwriting nuances. Use it to set a personal ceiling, then let a licensed loan officer translate that into a pre-approval that sellers will trust.
Checklist before you apply
- Use gross monthly income from stable sources you can document.
- Include car loans, student loans, and minimum credit-card payments.
- Add a realistic tax and insurance estimate for your target ZIP.
- Leave room under the maximum for maintenance and emergencies.
- Get pre-approved so your shopping range matches lender reality.
For the formulas behind every estimate, see how we calculate.