US Mortgage Affordability Calculator

About US Mortgage Affordability Calculator

How the 28/36 DTI Rule Works

Most US lenders use two DTI ratios to decide how much they will lend you:

Ratio	What It Measures	Limit	What Counts
Front-end (28%)	Housing costs as % of gross income	28%	Mortgage payment + property tax + insurance (PITI)
Back-end (36%)	Total debt as % of gross income	36%	All of the above + car loans, student loans, credit card minimums, other debt

The calculator applies both rules and uses whichever gives the lower (more conservative) result.

Worked example: Gross income $80,000/year ($6,667/month), existing debts of $400/month:

• Front-end: 28% x $6,667 = $1,867/month for housing
• Back-end: 36% x $6,667 = $2,400/month total debt, minus $400 existing = $2,000 for housing
• The front-end ratio is more restrictive ($1,867 < $2,000), so that is your comfortable limit

At 6.5% interest over 30 years, $1,867/month (after deducting estimated taxes and insurance) supports roughly a $290,000 home with 10% down.

FHA, VA, and Conventional Loan Differences

The 28/36 rule applies to conventional loans. Other loan types have different DTI limits:

Loan Type	Min Down Payment	Max DTI	PMI Required?	Best For
Conventional	3-20%	28/36 (up to 43 with strong credit)	Yes, if under 20% down	Borrowers with good credit (680+)
FHA	3.5%	31/43 (up to 50 with compensating factors)	Yes, for entire loan term	First-time buyers, lower credit scores
VA	0%	No front-end limit, 41% back-end guideline	No (VA funding fee instead)	Active military, veterans, eligible spouses
USDA	0%	29/41	Guarantee fee instead	Rural and suburban areas, income limits apply

The median existing home sale price in the US climbed to $429,300 in May 2026, up 1.3% year over year (NAR, June 2026 release) - the 35th consecutive month of annual price gains, with existing-home sales up 3.2% month-on-month to a seasonally adjusted 4.17 million pace. With the average 30-year fixed rate at 6.52% in the Freddie Mac PMMS for the week ending 11 June 2026 (up from 6.48% the prior week), a household typically needs roughly $105,000-$125,000 in annual gross income to comfortably afford a median-priced home with 10% down, assuming modest existing debts.

PMI, Property Tax, and the Full Cost of US Homeownership

Your mortgage payment is just one part of the monthly cost. A realistic budget includes:

Cost	Typical Amount	Notes
Principal and interest	Varies by loan	The core mortgage payment
Property tax	0.27-2.23% of home value/year	Varies by state. NJ averages 2.23%, Illinois 2.07%, Hawaii 0.27% (Tax Foundation, 2026)
Homeowners insurance	$1,200-3,600/year	Required by lenders. Flood zones cost more.
PMI	0.5-1.5% of loan/year	Required if down payment under 20% on conventional loans. Drops off at 80% LTV.
HOA fees	$0-500+/month	Common in condos and planned communities
Maintenance	1-2% of home value/year	Budget 1% for newer homes, 2% for older homes

On a $350,000 home, these extras can add $500-1,200/month beyond the mortgage principal and interest. Always budget for the full picture.

Closing costs in the US typically run 2-5% of the home price. On a $350,000 home, expect $7,000-17,500 covering loan origination fees, appraisal, title insurance, attorney fees, prepaid taxes, and recording fees.

Comfortable vs Stretch Budget

The calculator shows two numbers:

• Comfortable: Based on the 28% front-end ratio. Leaves room for savings, unexpected expenses, and lifestyle spending. This is the amount most financial advisors recommend.
• Stretch: Based on a 33% housing ratio. Gets you a nicer home but leaves less financial flexibility. Only consider this if you have no other debts, a stable income trajectory, and an emergency fund already in place.

A common mistake is buying at the stretch budget and then being unable to save, invest, or handle unexpected costs. The most expensive house a lender will approve is not the most you should spend.

How Much Income Do You Need by Home Price?

A good rule of thumb is that the home price you can comfortably afford is 3-4x your gross annual income, assuming a 10-20% down payment, modest debts, and current rates near 6.5%. The table below gives the income needed for the 28% front-end rule at various price points with a 10% down payment at 6.46% over 30 years. Property tax is set at 1.2% (national average), insurance at $150/month.

Home Price	Loan (10% down)	Monthly PITI	Required Gross Income
$250,000	$225,000	~$1,815	~$77,800/yr
$350,000	$315,000	~$2,481	~$106,300/yr
$408,800 (US median)	$367,920	~$2,873	~$123,100/yr
$500,000	$450,000	~$3,481	~$149,200/yr
$750,000	$675,000	~$5,147	~$220,600/yr
$1,000,000	$900,000	~$6,814	~$292,000/yr

Incomes above are approximate and assume the 28% front-end rule is the binding constraint (not the 36% back-end limit). If you carry significant monthly debts, the back-end ratio typically kicks in first and the required income rises.

How Interest Rates Change What You Can Afford

Each 1% move in mortgage rates changes buying power by roughly 10%, which is one reason affordability headlines swing so hard when the Fed moves. The table shows the max home price a $100,000/year household (no other debts, 10% down, $150/month insurance, 1.2% property tax) can afford under different rate environments.

30-Year Fixed Rate	Monthly PI per $1K borrowed	Max Home Price	Change vs 6.5%
3.0% (2020-2021 lows)	$4.22	~$445,000	+32%
4.5%	$5.07	~$390,000	+16%
5.5%	$5.68	~$360,000	+7%
6.46% (April 2026)	$6.29	~$337,000	baseline
7.5%	$6.99	~$315,000	-7%
8.0% (2023 peak)	$7.34	~$305,000	-10%

For context, the Freddie Mac Primary Mortgage Market Survey recorded a low of 2.65% in January 2021 and a peak of 7.79% in October 2023. As of the week ending 11 June 2026 the 30-year FRM stood at 6.52% (PMMS), having traded in a narrow 6.48-6.53% range through May and early June. A buyer who waited a year can often gain or lose tens of thousands of dollars of buying power on the rate alone.

Why Lenders Also Look Beyond the 28/36 Rule

The 28/36 rule is a starting point, not the whole underwriting process. Lenders combine DTI with three other factors that can push your approved amount above or below the calculator's estimate.

Factor	What Strong Looks Like	What Weak Looks Like
Credit score (FICO)	740+ (best pricing)	Under 620 (FHA or denial)
Cash reserves after closing	6+ months of PITI in savings	Zero reserves, all cash at closing
Employment history	2+ years same industry, W-2	New self-employment, gaps
Loan-to-value (LTV)	Under 80% (no PMI)	Over 95% (max PMI, FHA only)

The Consumer Financial Protection Bureau's Qualified Mortgage rule allows lenders to approve DTIs up to 43% (and automated underwriting sometimes stretches to 50% on strong files), but the rate pricing and approval odds drop sharply past the 36% threshold. A borrower with a 760 FICO, 12 months of reserves, and 20% down will often get approved at 42% DTI; a borrower with 640 FICO and 3% down typically will not.

Renting vs Buying at Today's Prices

Whether buying beats renting depends on how long you stay, what rates are doing, and how much your local rent-to-price ratio leans. As of Q1 2026 the national rent-to-price ratio for single-family homes is around 4.5-5.0% (Zillow Observed Rent Index divided by Zillow Home Value Index on typical homes), which is historically mid-range. The NY Fed and Harvard's Joint Center for Housing Studies both use 5 years as the usual buy-vs-rent break-even on a median market, but the number swings from 3 years (cheap homes, rising rents) to 10+ years (expensive homes, stable rents). The buy vs rent calculator does the side-by-side comparison including maintenance, insurance, property tax, and opportunity cost of the down payment.

Common Affordability Mistakes

Mistake	Why It Happens	Fix
Using pre-tax income in your own spending calc	Lenders use gross income so buyers do too	Double-check the monthly payment against your net take-home pay
Ignoring PMI on a 5% down loan	Online calculators quietly drop it	Add 0.5-1.5% of loan amount/year until you hit 80% LTV
Budgeting no maintenance reserve	New-build buyers assume nothing will break	Set aside 1% of home value a year, 2% for homes over 25 years old
Treating pre-approval as your budget	The bank approved the max, not the right number	Cut the pre-approval figure by 10-15% to leave headroom for savings and shocks
Forgetting closing costs and moving expenses	Focus is on the down payment alone	Add 2-5% of price for closing plus $2,000-5,000 for moving and immediate repairs

Once you know your budget, the mortgage calculator shows exact monthly payments for a specific home price. To check your overall debt load, the DTI calculator gives a quick ratio check. If you are working out your monthly spending plan, the budget calculator can help you see the full picture.

All calculations run in your browser. No financial data is sent anywhere.

Sources

• Freddie Mac - Primary Mortgage Market Survey (weekly 30-year rates)
• National Association of Realtors - Existing-Home Sales, May 2026 (released June 2026)
• Tax Foundation - Property Taxes by State and County, 2026
• CFPB - Qualified Mortgage Rule (Regulation Z, 43% DTI)
• FHFA - Conforming Loan Limits and PMI Guidance
• FRED - 30-Year Fixed Rate Mortgage Average
• HUD - FHA 203(b) Loan Program Overview