Mortgage Affordability

Estimates the highest home price whose first monthly housing payment stays within two planning caps: 28% of gross monthly income for housing, and 36% of gross monthly income for housing plus the other debts you enter.

The home price is the most expensive house whose first monthly housing payment still fits the tighter cap. It is not a loan offer.

1. Enter gross annual income, other monthly debt payments, and the down payment you have.
2. Set the rate, term, property tax, insurance, homeowners association dues, and private mortgage insurance rate.
3. Read the home price, the loan, and the first monthly housing payment.

28/36 planning guideline

Gross monthly income is annual income divided by 12, rounded to the cent. The housing cap is 28% of that income. The debt cap is 36% of that income minus other monthly debts. The lower cap limits the first housing payment. The price is the highest cent at which principal and interest, property tax, insurance, homeowners association dues, and private mortgage insurance stay within that cap. Principal and interest use the fixed-rate loan payment, rounded to the cent.

Source. Gross monthly income is the annual income divided by 12, rounded to the cent. The housing cap is 28 percent of that income. The debt cap is 36 percent of that income minus the other monthly debts entered. The lower cap is the most the first housing payment may be. The Consumer Financial Protection Bureau defines a debt-to-income ratio as monthly debt payments divided by gross monthly income, and says different lenders have different limits. The 28 and 36 figures are this page's planning guideline. The home price is the highest cent at which the mortgage calculator's first monthly housing payment stays within that cap. Principal and interest are the fixed-rate loan payment rounded to the cent. Property tax, insurance, homeowners association dues, and private mortgage insurance follow the mortgage page, including private mortgage insurance only when the down payment is under 20 percent of the price. CFPB, What is a debt-to-income ratio?.

Updated November 1, 2026

Gross monthly income is $10,000.00, one twelfth of $120,000.00. The 28% housing cap is $2,800.00. Other debts of $400.00 leave $3,200.00 under the 36% cap, so the housing cap is the one that limits the price. The highest price whose first monthly housing payment stays within $2,800.00 is $384,699.99. $384,699.99 with $40,000.00 down (10.4%) borrows $344,699.99 at 6.5% for 30 years. Principal and interest is $2,178.74 a month. Property tax of 1.1% adds $352.64 a month. $1,500.00 a year of insurance adds $125.00 a month. Private mortgage insurance of 0.5% of the loan adds $143.62 a month, because the down payment is under 20%. The first monthly housing payment is $2,800.00. This is a planning guideline, not a lender's approval.

• The 28% and 36% figures are a planning guideline. A lender can allow a higher or lower share of income.
• Property tax is a percent of the price. Insurance and homeowners association dues are the dollar amounts you enter.
• Private mortgage insurance is included only when the down payment is under 20% of the price, using the same rule as the mortgage calculator.

Does this mean a lender will approve the price?

No. Lenders set their own debt-to-income limits, and they also look at credit, cash reserves, and the property. This page applies a 28% housing cap and a 36% total-debt cap so you can plan.

Why does the price end in 99 cents?

The result is the highest cent that still fits. The next cent makes the rounded housing payment go over the cap.

When is private mortgage insurance included?

Only when the down payment is under 20% of the solved price. At 20% or more, the housing payment has no private mortgage insurance.