The answer depends on more than just your salary. Lenders look at your income, existing debts, down payment, and credit score together to decide what you qualify for. This calculator uses the same 28/36 rule that most lenders apply — so you get a realistic number before you ever talk to a bank.
How to Use This Calculator
Enter your gross annual income (before taxes), all your existing monthly debt payments (car loans, student loans, credit cards), and how much you have saved for a down payment. Add your estimated interest rate and choose a loan term. The calculator does the rest.
The 28/36 Rule Explained
Most lenders use two key thresholds:
- 28% rule (front-end DTI): Your monthly housing costs shouldn't exceed 28% of your gross monthly income.
- 36% rule (back-end DTI): Your total monthly debt payments (housing costs + other debts) shouldn't exceed 36% of gross income.
Your maximum affordable home price is based on whichever limit is lower. Some lenders allow DTI up to 43% (the FHA maximum), but that leaves very little financial cushion.
Example — $80,000 Annual Income
At $80,000/year ($6,667/month gross):
- 28% rule → max housing payment: $1,867/month
- With 7% interest, 30-year loan, 10% down → affordable home around $265,000
Bump the down payment to 20% and that same payment supports a higher loan balance, potentially pushing the affordable price to $295,000+.
Down Payment Impact
Your down payment directly affects how much you can borrow — and your monthly payment. A larger down payment means a smaller loan, no PMI, and lower monthly costs. Even going from 5% to 10% down on a $300,000 home saves you roughly $85/month in PMI alone.
Frequently Asked Questions
Does this calculator account for property taxes?
Yes — enter your estimated monthly property tax. A rough estimate is 1–1.5% of home value per year.
What if I have no debt?
With zero existing debt, the back-end DTI limit doesn't constrain you — the front-end 28% rule applies.
Is this the same as mortgage pre-approval?
No. This gives you an estimate. Pre-approval requires a full credit check and income verification.
Ready to calculate your monthly payments?
Now that you know your price range, get your exact monthly payment details or check refinance savings.