US House Affordability Calculator

About US House Affordability Calculator

How Is Affordability Calculated?

The calculator uses the front-end DTI approach: your total monthly housing payment (PITI + PMI) should not exceed a set percentage of your gross monthly income. You choose the percentage using the comfort slider.

Max Housing Payment = Gross Monthly Income x Comfort Level %

It then subtracts estimated property tax, insurance, and PMI to find the maximum mortgage payment, and works backwards to find the home price.

Worked example: $90,000 annual income ($7,500/month), 10% down payment, 6.5% rate, 30-year term, 28% comfort level:

• Max housing payment: $7,500 x 28% = $2,100/month
• Estimated property tax: ~$280/month (1.1% of home price / 12)
• Estimated insurance: ~$125/month
• Estimated PMI: ~$100/month (0.5% of loan / 12)
• Available for mortgage P&I: $2,100 - $280 - $125 - $100 = $1,595
• Max loan at 6.5% for 30 years: ~$252,000
• With 10% down payment: max home price ~$280,000

The 28/36 Rule

The most widely cited affordability guideline:

Rule	Limit	What It Means
28% rule (front-end)	Housing costs under 28% of gross income	Your mortgage, tax, insurance, and PMI combined
36% rule (back-end)	All debts under 36% of gross income	Housing + car + student loans + credit cards + other

At 28%, here is what different income levels can typically afford (6.5% rate, 20% down, 30-year term):

Annual Income	Max Housing Payment	Approximate Max Home Price
$50,000	$1,167	~$170,000
$75,000	$1,750	~$270,000
$100,000	$2,333	~$365,000
$125,000	$2,917	~$460,000
$150,000	$3,500	~$555,000
$200,000	$4,667	~$745,000

These assume 20% down and no other significant debts. With 10% down, the max price drops because of PMI and higher loan amounts.

Conservative vs Aggressive: What the Comfort Level Means

Comfort Level	% of Gross Income	Best For	Trade-off
Conservative	20-25%	Single income, high expenses, variable income	Less house, more financial flexibility
Moderate (28%)	28%	Dual income, stable employment, moderate debts	Standard recommendation
Stretch	30-33%	High-cost areas, rapid income growth expected	Tight budget, less room for savings
Aggressive	35-36%	Low other debts, high savings already	Financial stress likely, little margin for error

A key insight: the 28% rule uses gross income, but you spend net income. If your effective tax rate is 25%, then 28% of gross equals about 37% of your take-home pay going to housing. At 33% of gross, you are spending roughly 44% of net income on housing.

The Full Monthly Cost of Homeownership

The mortgage payment is not the only housing cost. Budget for all of these:

Cost	Typical Amount ($350K Home)	Included in Calculator?
Principal & interest	$1,770/month	Yes
Property tax	$320/month (1.1%)	Yes
Homeowners insurance	$125/month	Yes
PMI (if under 20% down)	$120/month	Yes
Maintenance & repairs	$290/month (1% of value/year)	No
HOA fees (if applicable)	$100-400/month	No
Utilities	$200-400/month	No

The true monthly cost of owning a $350,000 home is closer to $2,800-3,200 when you include everything, not just the $1,770 mortgage payment. Factor in at least 1% of the home value per year for maintenance.

How Down Payment Affects Affordability

A larger down payment increases your buying power in two ways: it reduces the loan amount (lower payment) and eliminates PMI once you reach 20%.

Down Payment	Max Home ($90K income, 28% DTI, 6.5%)	PMI?
5%	~$255,000	Yes (~$115/month)
10%	~$280,000	Yes (~$100/month)
15%	~$305,000	Yes (~$60/month)
20%	~$330,000	No
25%	~$360,000	No

Going from 5% to 20% down increases your buying power by about $75,000. Use the down payment calculator to see how different down payment percentages affect your specific numbers.

To check how a new mortgage affects your overall debt load, the debt-to-income ratio calculator shows front-end and back-end DTI. For specific monthly payment estimates on a property you are considering, the mortgage calculator breaks down the payment in detail.

What Is the Current Mortgage Rate Environment?

As of mid-April 2026, Freddie Mac reports the 30-year fixed-rate mortgage averaging 6.3%, down from 6.46% at the start of April. Rates have drifted lower through spring 2026 but remain well above the 3-4% range buyers enjoyed from 2020-2021. The National Association of Realtors reported a median existing-home sales price of $408,800 in March 2026 (a record for that month), with NAR forecasting prices to rise roughly 4% across 2026.

Regional pricing matters enormously. March 2026 NAR medians by region:

Region	Median Price (Mar 2026)	Income Needed at 28% DTI (20% down, 6.3%)
Midwest	$315,500	~$77,000
South	$362,600	~$88,000
Northeast	$494,500	~$120,000
West	$613,400	~$149,000

A buyer earning the US median household income (roughly $80,000) can comfortably afford the Midwest median but is priced out of the West without a larger down payment, a co-borrower, or stretching past the 28% rule.

How Much Does a 1% Rate Change Affect Affordability?

Interest rate moves hit affordability harder than most buyers expect. At a $2,100 monthly principal-and-interest budget, here is the maximum loan amount at different rates over 30 years:

Rate	Max Loan for $2,100/mo P&I	Change vs 6.5%
4.0%	~$439,900	+$107,500
5.0%	~$391,200	+$58,800
6.0%	~$350,300	+$17,900
6.5%	~$332,400	baseline
7.0%	~$315,700	-$16,700
8.0%	~$286,100	-$46,300

Every 1% rate increase cuts roughly 10% from the loan amount a given payment can support. This is why many buyers choose to buy now and refinance later if rates drop, rather than wait for a hypothetical lower rate on a higher-priced home. The refinance calculator can show when refinancing breaks even after closing costs.

Front-End vs Back-End DTI: What Lenders Actually Look At

Most conventional lenders cap back-end DTI at 45% (sometimes 50% with compensating factors like strong credit or large reserves). FHA loans can go to 50-57% back-end DTI. The 28/36 rule is a planning guideline, not a lender requirement - a borrower with $0 in other debts can have 36% of gross going to housing and still clear a 36% back-end ratio.

Loan Type	Typical Front-End Cap	Typical Back-End Cap	Min Credit Score
Conventional	28%	43-45% (up to 50% with factors)	620
FHA	31%	43% (up to 57% with factors)	580 (3.5% down)
VA	No fixed limit	41% guideline	No set minimum
USDA	29%	41%	640 typical
Jumbo	28%	43%	700+

The calculator uses the tighter of the two: it takes your chosen front-end comfort level, then also enforces a 36% back-end cap after subtracting your non-housing monthly debts. Paying off a $400/month car loan before applying frees up roughly $60,000-$70,000 in home-buying power at typical current rates.

Common Mistakes That Inflate Your Estimate

• Using gross income as if it were spendable. A 28% DTI on gross maps to roughly 35-40% of take-home pay after federal, state, FICA, and 401(k). Factor this in when the calculator says you "can afford" $500,000.
• Ignoring property tax variance. Effective rates vary from around 0.3% (Hawaii) to over 2.2% (New Jersey, Illinois). A $400,000 home costs $1,200/year in Hawaii but $8,800/year in New Jersey. Look up your county's effective rate on the Tax Foundation annual ranking before trusting a national 1.1% default.
• Forgetting HOA and condo fees. Condos often carry $300-$600/month HOA dues, which lenders add to your housing payment for DTI. A $350,000 condo can have the same DTI impact as a $400,000 single-family home.
• Underestimating maintenance. The 1% rule (1% of home value per year for upkeep) is a floor, not an average. Older homes, larger lots, and pools push this to 2-4%. Ally Bank research found homeowners spend an average of $6,400/year on maintenance.
• Forgetting closing costs deplete down payment. Closing costs typically run 2-5% of the purchase price. On a $400,000 home that is $8,000-$20,000 in cash on top of the down payment. Many buyers underestimate this and end up stretching.
• Assuming current income will grow. Lenders qualify you on current income. Do not stretch now expecting a raise - use the mortgage affordability calculator to see what your current numbers actually support.

How PMI Works and When It Comes Off

Private mortgage insurance protects the lender, not you. It kicks in when your down payment is below 20% of the purchase price on a conventional loan. Typical costs:

Credit Score	Typical PMI Rate (annual)	Monthly on $300K loan
760+	0.30-0.55%	$75-$138
720-759	0.40-0.70%	$100-$175
680-719	0.55-0.95%	$138-$238
640-679	0.85-1.40%	$213-$350
620-639	1.20-1.80%	$300-$450

Under the federal Homeowners Protection Act, lenders must automatically cancel PMI when your scheduled loan balance reaches 78% of the original home value. You can request cancellation at 80% loan-to-value, often sooner if an appraisal confirms appreciation. FHA loans have separate MIP rules: MIP stays for the life of the loan if the down payment was under 10%, or drops off after 11 years with 10%+ down.

Sources

• Freddie Mac - Primary Mortgage Market Survey (30-year fixed rate)
• National Association of Realtors - Existing-Home Sales Statistics
• Consumer Financial Protection Bureau - Private Mortgage Insurance
• HUD - FHA 203(b) Loan Program and MIP Rules
• Tax Foundation - Property Taxes by State and County
• Federal Housing Finance Agency - Conforming Loan Limits and Regulation
• FRED (St. Louis Fed) - 30-Year Fixed Rate Mortgage Average

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