Estimate a comfortable purchase price using the classic 28/36 guideline lenders use.
How this is calculated Embed on your siteUpdated October 2026
This calculator estimates the most expensive home you can carry using the same two ratios most mortgage lenders start with. With the default inputs, a household earning $120,000 a year with $600 a month in other debt payments and $80,000 saved for a down payment can afford a home around $418,000 at a 6.5% mortgage rate. That puts the full housing payment, including property tax, insurance and PMI, at the $2,800 a month the 28% rule allows.
Lenders look at two debt-to-income ratios, both measured against your gross monthly income:
Whichever limit is lower sets your budget. On $120,000 a year, gross monthly income is $10,000, so the front-end limit is $2,800 and the back-end limit is $3,600 minus your other debts. With $600 of other debt the back-end allows $3,000, so the 28% limit is the one that binds.
Other debt matters more than most buyers expect. Raise that household's other payments to $1,500 a month and the back-end limit drops to $2,100, cutting their price range from about $418,000 to $344,000. Paying off a car loan before you apply can be worth tens of thousands in buying power.
With $60,000 down, no other debt, a 6.5% 30-year mortgage, 1.1% property tax, 0.4% insurance, and 0.5% PMI when the down payment is under 20%:
| Household income | Max housing payment | Home price | Down payment share |
|---|---|---|---|
| $60,000 | $1,400 | $235,000 | 25.5% |
| $90,000 | $2,100 | $313,000 | 19.1% |
| $120,000 | $2,800 | $401,000 | 15.0% |
| $150,000 | $3,500 | $488,000 | 12.3% |
| $200,000 | $4,667 | $634,000 | 9.5% |
As income rises with the same savings, the down payment becomes a smaller share of the price and PMI kicks in, which eats into the budget. The calculator includes PMI automatically whenever your down payment is under 20%.
A 1.1% property tax rate and 0.4% insurance rate add about $523 a month to a $418,000 home, nearly a fifth of the payment. Both vary widely. Property tax rates range from well under 1% in some states to more than 2% in others, and insurance can be several times the national norm in areas exposed to hurricanes or wildfire. Look up the actual tax rate for the town you are considering and get an insurance quote before you settle on a price. The property tax calculator turns a local rate into a monthly figure.
The 28/36 rule describes what a lender may approve, not what fits your life. It ignores your retirement savings, childcare, how secure your job is, and the cost of maintaining a house, which often runs around 1% of the home's value a year. Many buyers feel more comfortable keeping the housing payment closer to 25% of gross income, or working backward from the payment they would be fine making in a lean month.
A few things worth checking before you commit:
Once you have a price, the mortgage calculator shows the full payment and amortization schedule. The rent vs buy calculator tests whether buying beats renting over the years you expect to stay. If you will put less than 20% down, the PMI calculator shows how long you will pay mortgage insurance. And the debt-to-income calculator checks your ratios the way a lender will.
With $80,000 down, $600 a month in other debts, and a 6.5% rate, about $418,000 under the 28/36 rule. Less debt, a larger down payment or a lower rate raises that figure.
A lending guideline: keep total housing costs at or below 28% of gross monthly income, and all debt payments combined at or below 36%. The lower of the two sets your maximum payment.
Yes. The payment includes principal, interest, property tax, homeowners insurance, and PMI when the down payment is under 20%. It does not include HOA dues.
Conventional loans can go as low as 3% down and FHA loans 3.5%, but under 20% you will pay mortgage insurance. Twenty percent avoids PMI and lowers your payment.
Usually not. Lender limits leave little room for retirement saving, maintenance or surprises. Many people aim for a payment closer to 25% of gross income.
The calculator solves for the price where principal, interest, tax, insurance and PMI equal the lower of your two ratio limits. Formula and assumptions are on our methodology page.