How much house can I afford?
Find the home price your income supports at the 28/36 lender guideline, plus the full monthly payment, cash to close and loan schedule.
What do you want to know?
Loan term
Lender limits (housing / all debts)
The usual guideline: 28% of gross income for housing and 36% for all debts. The FDIC describes it, and 36% is Fannie Mae’s standard limit for manually underwritten loans.
HOME PRICE THE LIMITS ALLOW
$536k
At these inputs, keeping housing to 28% of your income lets you buy a home up to $536,000 with 20% down. The full payment is about $3,381 a month including property tax and insurance. You need about $123,280 in cash to close.
Monthly payment
$3,381
Cash to close
$123k
Loan
$429k
Limit reached
28% housing
UNDERSTAND YOUR RESULT
What the monthly payment is made of
On a $536,000 home with 20% down, the loan payment is $2,853 of the $3,381 a month; property tax adds $398 and insurance $131.
How much the mortgage rate moves your ceiling
6%
$587k
6.5%
$560k
7%
$536k
7.5%
$513k
8%
$491k
On the same monthly budget, each half point of rate is worth roughly $24,000 of price: $587,000 at 6% down to $491,000 at 8%.
What different down payments buy
| Down payment | Max price | Cash to close | PMI a month |
|---|---|---|---|
| 5% | $431,000 | $34,480 | $205 |
| 10% | $453,000 | $58,890 | $204 |
| 15% | $476,000 | $85,680 | $202 |
| 20% | $536,000 | $123,280 | — |
| 25% | $567,000 | $158,760 | — |
On the same monthly budget, 5% down buys up to $431,000 and takes $34,480 in cash; 25% down buys up to $567,000 and takes $158,760. Under 20% down, mortgage insurance is part of the payment.
Loan schedule: interest and principal by year
| Year | Interest paid | Principal paid | Balance left |
|---|---|---|---|
| 1 | $29,878 | $4,356 | $424,444 |
| 2 | $29,563 | $4,671 | $419,774 |
| 3 | $29,225 | $5,008 | $414,765 |
| 4 | $28,863 | $5,370 | $409,395 |
| 5 | $28,475 | $5,759 | $403,636 |
| 10 | $26,070 | $8,164 | $367,964 |
| 15 | $22,661 | $11,573 | $317,393 |
| 20 | $17,828 | $16,406 | $245,703 |
| 25 | $10,976 | $23,257 | $144,073 |
| 30 | $1,263 | $32,970 | $0 |
On a $428,800 loan at 7.00% over 30 years, year 1 pays $29,878 of interest and $4,356 of principal, and $598,214 of interest is paid over the life of the loan.
What moves the needle
Each row re-runs the calculation with one change. Click to apply.How it's computed
FORMULA
Monthly cost = loan × f + price × tax ÷ 12 + insurance ÷ 12 + HOA + PMI
f = r ÷ (1 − (1 + r)^−n), with r = rate ÷ 12 and n = years × 12
Budget = the lower of housing limit × income and total-debt limit × income − other debts
Price = (budget − insurance ÷ 12 − HOA) ÷ [(1 − down) × (f + PMI ÷ 12) + tax ÷ 12]
- Lenders count principal, interest, property tax, insurance, HOA dues and mortgage insurance against the 28% housing limit, and that total plus your other monthly debts against the 36% limit. The lower of the two sets the budget.
- A conventional fixed-rate loan at 7.00% over 30 years with monthly payments, and no points or fees rolled into the loan. FHA, VA and USDA loans have their own insurance and fees.
- Property tax is 0.89% of the price a year and insurance $1,569 a year, both held flat. Maintenance and repairs are not included.
- No mortgage insurance: the down payment is 20% or more.
- Cash to close is the down payment plus closing costs at 3% of the price (Freddie Mac: 2% to 5%).
- The ceiling is rounded down to the nearest $1,000. It is a planning estimate, not a pre-approval: a lender also checks credit, assets and the property.
WORKED EXAMPLE · SAMPLE NUMBERS
$145,000 ÷ 12 = $12,083 a month. The housing limit (28%) allows $3,383; the total-debt limit (36%) allows $4,350, less $360 of other debts = $3,990. The lower, $3,383, is the budget. Insurance takes $131, leaving $3,253. Each $1 of price costs 0.006064 a month (loan 0.005322, tax 0.000742). Price = $3,253 ÷ 0.006064 = $536,368, rounded down to $536,000.
SOURCES
[1]How Much Mortgage Can I Afford? (front-end and back-end ratios)FDIC Money Smart[2]Selling Guide B3-6-02, Debt-to-Income RatiosFannie Mae, 04/02/2025[3]Breaking down PMIFreddie Mac, My Home[4]What are closing costs and how much will I pay?Freddie Mac, My Home[5]Primary Mortgage Market Survey: weekly 30-year and 15-year fixed ratesFreddie Mac[6]FHFA Announces Conforming Loan Limit Values for 2026Federal Housing Finance Agency[7]Median real estate taxes paid and median home value (tables B25103 and B25077), 2024 1-year estimatesU.S. Census Bureau, American Community Survey[8]Average premiums for homeowners insurance (HO-3), 2013–2022NAIC data, published by the Insurance Information Institute (Triple-I)HSBuilt by Hussain Sehorewala · checked against worked examples · Sep 29, 2026
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Questions about this result
A common guideline keeps housing costs (principal, interest, property tax, insurance and any HOA dues) to 28% of gross monthly income and all monthly debts to 36% (FDIC). Fannie Mae’s standard limit for manually underwritten loans is also 36%; it allows up to 45% with strong credit and reserves, and up to 50% on loans its automated system approves. This page finds the price where your payment reaches the lower of the two limits.
Quick estimates often apply the 28% to the loan payment alone. Lenders count the whole housing payment, so property tax, insurance and any HOA dues use part of the same budget, and the price that fits is lower. Mortgage insurance counts too when the down payment is under 20%.
No, but under 20% a conventional loan usually carries private mortgage insurance, which Freddie Mac puts at about $30 to $70 a month for every $100,000 borrowed. It ends automatically when the scheduled balance reaches 78% of the original value, and you can ask to cancel at 80% (Homeowners Protection Act). A larger down payment raises the price ceiling and the cash you need; the down payment table shows both.
Your down payment plus closing costs. Freddie Mac’s My Home guide says to expect closing fees of 2% to 5% of the purchase price; this page uses 3%. Your lender’s Loan Estimate lists the real figure, and some lenders also want cash reserves left after closing.
Use the rate on a lender’s quote for your credit and down payment. Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed rate at 7.03% for the week of September 24, 2026 (6.42% for a 15-year loan), and it moves from week to week; this page starts at 7.0%. Try the rate levers a point higher and lower before settling on a price.
Both depend on where the home is. The page starts from national figures: property tax of 0.89% of value a year (a median of $3,211 on a median home value of $360,600, Census Bureau American Community Survey, 2024) and $1,569 a year for homeowners insurance (the 2022 average HO-3 premium from the NAIC, the latest published; premiums have risen since). Replace both with your county’s tax rate and an insurance quote.
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