How it works
Lenders commonly use two debt-to-income limits. The front-end ratio caps your housing payment (principal, interest, taxes, insurance and HOA) at about 28% of gross monthly income. The back-end ratio caps housing plus all other debt payments at about 36%.
This calculator finds the housing payment allowed by whichever limit is tighter, then works backward to the home price that payment supports, given your down payment, rate, property tax and insurance.
Many loan programs allow higher ratios (FHA and some conventional loans go to 43–50% back-end), so you can raise the limits to see what a lender might approve. What is comfortable for your budget can be lower.
Formula
Max housing = min(28% × income, 36% × income − debts); price = (max housing − insurance − HOA + k × down) ÷ (k + tax rate ÷ 12), where k is the payment per $1 borrowed
Questions people ask
What is the 28/36 rule?
A guideline that housing costs should stay at or below 28% of gross monthly income and total debt payments at or below 36%. It is a starting point lenders use, not a legal limit.
Do lenders use gross or net income?
Gross income, before taxes and deductions. That is why a payment that fits the ratios can still feel tight once taxes and savings are taken out.
Does this include PMI?
No. If you put down less than 20% on a conventional loan, PMI (often 0.3–1.5% of the loan per year) would raise the payment and reduce the affordable price.