Home Affordability Calculator
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Max home price (28% rule)$320,000
Max monthly payment$1,983
Down payment %12.5%
DTI ratio33%
The 28/36 Rule Explained
The 28/36 rule is the most widely used affordability guideline. It says:
- 28% rule: Your total housing costs (mortgage payment, property taxes, insurance, HOA) shouldn't exceed 28% of your gross monthly income
- 36% rule: All debt payments combined (housing + car loans + student loans + credit cards) shouldn't exceed 36% of gross monthly income
Lenders typically allow up to 43% total DTI for conventional loans and up to 50% for FHA loans. But just because you can qualify for more doesn't mean you should borrow more — staying at 36% or below keeps your finances comfortable.
Home Price by Income (2026)
| Annual Income | Conservative (3x) | Moderate (4x) | Aggressive (5x) |
|---|---|---|---|
| $50,000 | $150,000 | $200,000 | $250,000 |
| $75,000 | $225,000 | $300,000 | $375,000 |
| $100,000 | $300,000 | $400,000 | $500,000 |
| $125,000 | $375,000 | $500,000 | $625,000 |
| $150,000 | $450,000 | $600,000 | $750,000 |
| $200,000 | $600,000 | $800,000 | $1,000,000 |
At 6.75% rates: These multipliers are lower than historical norms due to elevated rates. In 2020–2021 at 3% rates, buyers could afford roughly 20–30% more home for the same payment. Factor in realistic property taxes (1–2% of home value/year) and homeowner's insurance ($1,500–$3,000/year) in your budget.
Hidden Costs First-Time Buyers Miss
- Property taxes: 1–2% of home value per year — on a $350,000 home, $3,500–$7,000/year
- Homeowner's insurance: $1,500–$3,000/year nationally; higher in hurricane/flood zones
- PMI: Required if down payment is under 20% — typically $100–$200/month on a $350,000 loan
- HOA fees: $200–$800/month in many communities
- Maintenance: Budget 1–2% of home value annually for upkeep and repairs
- Closing costs: 2–5% of loan amount, due at closing
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Use the Full Mortgage Calculator →Frequently Asked Questions
How much house can I afford on $80,000 a year?
At $80,000/year with 6.75% rates and 20% down, you can comfortably afford approximately $250,000–$300,000 following the 28% rule. That's a monthly payment of $1,867/month on a $280,000 mortgage, which equals 28% of your $6,667 monthly gross income. Low existing debt allows you to stretch higher.
What is the 28/36 rule?
The 28/36 rule: total housing costs shouldn't exceed 28% of gross monthly income, and all debt payments shouldn't exceed 36%. It's a guideline for financial health — lenders may approve up to 43–50% DTI, but staying at 36% or below keeps your budget comfortable.
How much do I need for a down payment?
Minimum: 3% for conventional, 3.5% for FHA (580+ score), 0% for VA and USDA. Recommended: 20% to eliminate PMI. First-time buyer programs often offer down payment assistance — check HUD-approved counselors in your state for programs.
How do current rates affect affordability?
Significantly. At 3% (2021 rates), a $2,000/month payment supported a $475,000 mortgage. At 6.75% (2026), the same payment supports about $295,000. High rates have reduced purchasing power by roughly 35% from the pandemic-era lows — which is why affordability is at multi-decade lows despite some price corrections.