28% income rule
How to use the affordability calculator
A safe mortgage payment is roughly 28% of your gross monthly income, including principal, interest, taxes, and insurance (PITI). Your total debt payments — mortgage plus student loans, car loans, and credit cards — should stay under 36% of gross income. Lenders use these two ratios to set borrowing limits.
Level
Try calculatorKey takeaways
04 · ideas- Front-end ratio: housing costs should stay under 28% of gross income
- Back-end ratio (DTI): all debts should stay under 43% total
- A $7,000/month income supports roughly $280k–$350k at current rates
- Down payment size directly affects both price range and monthly cost
Illustrative chart
$200k · 7.5% · 30yr
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The affordability calculator answers: how much home can I actually afford? It uses two inputs — your income and your existing debts — and two guardrails from the lending industry.
The two rules lenders use:- Housing ratio (front-end DTI): Your total monthly housing costs (PITI) should be no more than 28% of gross monthly income
- Total DTI (back-end): All monthly debt payments (housing + car + student loans + credit cards) should be no more than 36–43% of gross income
These aren't just suggestions — they're the thresholds most lenders require for loan approval.
Quick estimate:- Monthly income × 28% = max housing payment (PITI)
- Subtract taxes + insurance estimate to get max P&I
- Work backward to find the home price