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How Much House Can I Afford?
Get the home price that actually fits your budget — based on the 28/36 rule, your real debts, taxes, insurance, and PMI — not just what a lender will approve.
Sources & Methodology
- CFPB: What is a debt-to-income ratio? — definitions of front-end and back-end DTI used in this calculator
- Freddie Mac Primary Mortgage Market Survey (PMMS), weekly national averages for 30-year and 15-year fixed-rate mortgages
- U.S. Census American Community Survey — source for effective property tax rates by state
Related Questions
By Sean Baldwin · Last reviewed July 2026
The Verdict
Worth it if: you can hit your target price range with at least 10% down, a rate at or below 6.5%, and existing debts under 20% of gross income — you're buying from a position of strength.
Not worth it if: reaching the homes you want requires the lender-max 43% DTI budget, under 5% down, or a rate above 7.5% — the same house will cost you dramatically less if you first pay down debt or build the down payment.
Break-even threshold: the 28/36 rule is the line: when the house you want fits inside 28% of gross income for housing and 36% for total debt, the purchase is sustainable; beyond it you're trading future flexibility for square footage.
Frequently Asked Questions
What is the 28/36 rule?
The 28/36 rule says your housing payment (principal, interest, taxes, and insurance) should stay under 28% of your gross monthly income, and your total debt payments — housing plus car loans, student loans, and credit card minimums — should stay under 36%. This calculator uses whichever of the two limits is tighter for your situation, which is why adding monthly debts lowers your affordable home price.
Why does the calculator show less than my lender pre-approval?
Lenders routinely approve up to 43% debt-to-income, and some programs go higher. That is a ceiling on default risk for the lender, not a comfort level for you. The gap between our 28/36 number and your pre-approval is money the lender is willing to let you spend but that would leave you with little margin for repairs, job changes, or rising costs.
How does my down payment change what I can afford?
Two ways. Every extra dollar of down payment adds roughly a dollar to your affordable price at the same monthly budget. And once your down payment reaches 20% of the price, PMI disappears — freeing up $100–$400 a month that goes back into your buying power.
Do student loans count against how much house I can afford?
Yes. Your monthly student loan payment counts toward the 36% back-end limit, exactly like a car payment. A $400/month student loan payment reduces your affordable home price by roughly $60,000–$70,000 at current rates. If you are on income-driven repayment, lenders typically use the actual payment on your credit report.
What costs does this calculator include that others skip?
The affordable price here accounts for full PITI — principal, interest, property taxes at your local rate, homeowner's insurance — plus estimated PMI whenever your down payment is under 20%. Many affordability calculators quote a price based on principal and interest only, which overstates what you can afford by 20–30%.
Affordability vs. approval: they are not the same number
A lender's job is to decide the largest loan you can plausibly repay; your job is to decide the largest loan that still leaves you a life. Those are different questions with different answers. Underwriting commonly allows total debt payments up to 43% of gross income, and pre-approval letters reflect that ceiling. But a household earning $100,000 that borrows to a 43% DTI is committing over $3,580 of every pre-tax month to debt — before income taxes, retirement savings, childcare, food, or the repairs every house eventually demands. This calculator deliberately anchors on the 28/36 rule instead, and shows the lender-max number alongside it so you can see the gap. That gap is your margin of safety. Homes at the top of a pre-approval feel affordable at closing and stop feeling affordable the first time the HVAC dies or one income drops.
The full monthly payment: PITI plus PMI
The most common affordability mistake is budgeting for principal and interest only. Your real payment is PITI: principal, interest, property taxes, and insurance. Property taxes average roughly 1.1% of home value nationally but range from about 0.3% in Hawaii to over 2% in New Jersey, Illinois, and parts of Texas — on a $400,000 home that is the difference between $100 and $700 a month, which is why this calculator lets you set your local rate. Homeowner's insurance adds roughly $150–$250 monthly in most states, more in coastal or wildfire-prone areas. And if your down payment is under 20%, PMI adds roughly 0.46%–1.5% of the loan amount per year. Skipping these lines overstates your affordable price by a quarter or more.
Monthly debts shrink your buying power more than you think
Because the 36% back-end limit covers all debt payments, every recurring monthly obligation directly displaces mortgage capacity. At a 6.5% 30-year rate, each $100 of monthly debt payment costs you roughly $15,800 of home price. A $450 car payment therefore removes about $70,000 from your affordable price — often more than doubling the impact people expect. This creates a genuinely useful decision rule: if you are within a year or two of buying, paying off a car loan or a credit card balance usually raises your buying power far more effectively than adding the same money to your down payment. Run the calculator twice, with and without a debt you could eliminate, and compare the two affordable prices before deciding where the next dollar goes.
When the answer is "less house than you hoped" — or "not yet"
Sometimes the honest output of an affordability calculation is that the homes you want are outside a comfortable budget. That is information, not failure, and the response options are concrete: increase the down payment (each $10,000 saved adds about $10,000 of price, and crossing 20% removes PMI entirely), reduce monthly debts (the highest-leverage move, per the math above), buy down the rate or shop more lenders (a half-point rate improvement on a $350,000 loan adds roughly $20,000 of buying power), extend your search radius, or wait while renting — which our Rent vs. Buy calculator can price out properly. What rarely works is stretching to the lender maximum and assuming future raises will close the gap. Housing costs rise with home ownership; budgets that only work if nothing goes wrong tend to go wrong.
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Further Reading
How We Calculate Your Score
The Worth It Score reflects how strong your position as a buyer is at your comfortable maximum price — the health of the purchase, not whether a lender would approve it. A high score means real equity, a fair rate, and low existing debt; a low score signals thin margins where waiting or paying down debt would improve the deal.
- · Base score: 55
- · Down payment at your comfortable max price: 20%+ adds 15 points; 10–19% adds 8 points; under 5% subtracts 10 points
- · Interest rate: 5.5% or below adds 10 points; up to 6.5% adds 5 points; up to 7.5% subtracts 5 points; above 7.5% subtracts 12 points
- · Existing debt load (debts ÷ gross monthly income): 10% or less adds 15 points; up to 20% adds 8 points; above 30% subtracts 15 points
- · Loan term bonus: 15-year term adds 5 points
- · If the 36% back-end budget leaves no room for any housing payment, the score is 0
Affordable price assumes property taxes at your selected rate, $150/month homeowner's insurance, and PMI at 0.75%/year of the loan when your down payment is under 20%. Your actual insurance and PMI quotes will vary.
How to Cite This Calculator
If you reference this calculator in an article, blog post, or research, use one of the formats below. The Worth It Score methodology is fully documented and independently verifiable.
APA
Baldwin, S. (2026). How Much House Can I Afford? Real Budget Calculator (2026). Worth It Calculators. https://worthitcalculators.com/how-much-house-can-i-afford/
MLA
Baldwin, Sean. "How Much House Can I Afford? Real Budget Calculator (2026)." Worth It Calculators, August 25, 2026, https://worthitcalculators.com/how-much-house-can-i-afford/.
Plain text / web
Source: How Much House Can I Afford? Real Budget Calculator (2026), Worth It Calculators (https://worthitcalculators.com/how-much-house-can-i-afford/)
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