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How Much House Can I Afford?

Find the most you could spend on a home from your income, debts, down payment and interest rate, using the same debt-to-income limits lenders apply. See a comfortable price, a stretch price and what would raise your budget.

Updated October 2026 Runs in your browser. Nothing is stored Results update as you type

Your numbers

Your total yearly income before tax. If you are buying with a partner, add both incomes together. Lenders use gross (pre-tax) income for their ratios.

$7,083 a month before tax

The minimum monthly payments on debts you already have: car loans, student loans, personal loans, credit card minimums, child support. Do not include rent, utilities or living costs.
/mo

5.6% of your gross income

The cash you will put towards the purchase. Keep closing costs (or stamp duty) and an emergency fund separate: only count the money that goes into the price itself.

12.3% of the maximum price

%

years

More options
Yearly property tax (council rates) plus home insurance. Lenders count these as part of your housing payment. Use 0 to see principal and interest only.
/yr

$400 a month

Homeowners association, condo or strata (body corporate) fees. Lenders add them to your housing costs.
/mo

Lender rules
Debt-to-income (DTI) limits. The first number is the most your housing payment may be, as a % of gross income (front-end). The second is the most all your debts together may be, including the new mortgage (back-end). 28/36 is conservative, 31/43 is typical, 36/50 is the upper edge some lenders allow.

Standard: housing up to 31% of gross income, all debts up to 43%

You could afford a home up to

$324,120

Borrowing $284,120 plus your $40,000 down payment, with housing costs of $2,196 a month

Maximum loan
$284,120

87.7% loan-to-value

Max monthly housing payment
$2,196

$1,796 loan + $400 tax, insurance & fees

Binding limit
Housing 31%

The 43% debt limit would allow $2,646/mo

Comfortable (28/36)
$290,500

Leaves the most breathing room

Stretch (36/50)
$380,153

Some lenders allow it; budgets get tight

Heads up
Over 80% LTV

Expect mortgage insurance, which lowers this budget

Your debts are not the bottleneck: the 31% housing limit is, so paying them off would not raise this figure (though it makes the payment easier to live with). A rate 1 point lower (5.5%) would lift your maximum to $356,285, $32,165 more.

Your gross monthly income at this price

  • Mortgage (principal & interest)$1,79625%
  • Tax, insurance & fees$4006%
  • Other debts$4006%
  • Everything else (before tax)$4,48863%

Maximum price at different interest rates

$0$100K$200K$300K$400K4.5%5.5%6.5%7.5%8.5%

Same income, debts and 31/43 rules. Around your rate, each 1 percentage point moves your budget by roughly $29,725.

How to use this home affordability calculator

You only need five numbers to get a realistic answer, and the result updates as you type. Use the sliders to see how quickly your budget moves when one thing changes.

  1. Gross annual income: your total yearly pay before tax. If you are buying with a partner, add both incomes together.
  2. Monthly debt repayments: the minimum payments on car loans, student loans, personal loans and credit cards. Leave out rent, bills and groceries.
  3. Down payment / deposit: the cash going into the price itself. Keep closing costs and your emergency fund separate.
  4. Interest rate and loan term: use a rate you have actually been quoted if you have one.
  5. Open "More options" to enter property tax and insurance, HOA or strata fees, and to pick the lender rules you want to test: conservative 28/36, standard 31/43 or stretch 36/50.

How lenders work out what you can afford

Lenders do not start with a house price. They start with your income and ask how much of it can safely go to repayments. That is your debt-to-income ratio (DTI), and they check two versions of it. The front-end ratio covers housing costs only. The back-end ratio covers housing plus every other debt you pay. Whichever limit is lower decides your budget.

Max housing payment = lower of (I × front %) and (I × back % − D)

I = gross monthly income · D = existing monthly debt repayments · front % and back % = the lender's DTI limits

Max loan = (H − T) × (1 − (1 + r)−n) ÷ r  ·  Max price = Max loan + down payment

H = max housing payment · T = monthly property tax, insurance and HOA · r = annual rate ÷ 12 · n = years × 12

The second formula runs the usual mortgage repayment formula backwards: instead of turning a loan into a repayment, it turns the repayment you can afford into the loan that repayment would support.

Worked example

Take an income of $85,000, $400 a month of other debt, a $40,000 down payment, a 6.5% rate over 30 years and $4,800 a year of property tax and insurance, using standard 31/43 rules.

  • Gross monthly income is $85,000 ÷ 12 = $7,083.
  • Front-end limit: 31% of $7,083 = $2,196 for all housing costs.
  • Back-end limit: 43% of $7,083 = $3,046, minus the $400 of existing debt = $2,646.
  • The front-end figure is lower, so housing costs are capped at $2,196. Tax and insurance take $400, leaving $1,796 a month for the loan.
  • At 6.5% over 30 years, every $1 of monthly repayment supports about $158.21 of loan, so $1,796 a month supports a loan of $284,120.
  • Add the $40,000 down payment and the maximum price is $324,120.

Under conservative 28/36 rules the same person tops out at $290,500; under stretch 36/50 rules, $380,153. The loan would be 87.7% of the price, so a lender would almost certainly add mortgage insurance, which would trim the budget a little further.

Front-end or back-end: which limit is holding you back?

The calculator tells you which limit is binding, because the fix is different for each. Under 31/43 rules the gap between the two limits is 12% of your income. If your other debts cost less than that, the housing limit binds and paying off a car loan will not raise your maximum (though it will make the payment easier to live with). If your debts cost more, the debt limit binds and every dollar of debt you clear goes straight into your housing budget.

In the example, 12% of $7,083 is about $850. Raise the monthly debts to $1,000 and the back-end limit takes over: the maximum price falls to $300,389. From there, every $100 a month of debt you pay off adds about $15,821 to what you can borrow. Our debt-to-income calculator breaks down both ratios in more detail.

Lender rulesHousing limitAll-debt limitWhere you see it
Conservative28%36%The classic rule of thumb, and a comfortable personal budget
Standard31%43%The standard ratios in US FHA guidelines, and a common middle ground
Stretch36%50%Some conventional loans approved through automated underwriting

What moves your budget the most

Using the worked example as a starting point, here is roughly what each change is worth:

  • Interest rate. A rate one point lower (5.5%) lifts the maximum to $356,285, about $32,000 more. One point higher (7.5%) drops it to $296,836. The chart above shows your own numbers across a 4-point range.
  • Income. An extra $10,000 a year raises the maximum to $364,991, about $41,000 more, because 31% of the extra income goes to housing.
  • Property tax and insurance. These come straight out of your housing budget. Raising them from $4,800 to $6,000 a year cuts the maximum to $308,299. Two homes at the same price can have very different budgets in high-tax and low-tax areas.
  • Down payment. Each extra dollar adds a dollar to the price you can pay, and once you reach 20% it usually removes mortgage insurance too. The savings goal calculator shows how long a bigger deposit would take.

Affordable is not the same as approved

A lender's maximum is a ceiling, not a target. It is based on gross income, so it ignores tax, retirement saving, childcare and everything else your take-home pay has to cover. Before you settle on a number, check three things.

  • Cash beyond the down payment. US closing costs are often 2–5% of the loan. In Australia and the UK, stamp duty can be a large one-off cost. Keep an emergency fund on top.
  • Upkeep. Many owners budget around 1% of the home's value a year for maintenance and repairs, which lenders do not count.
  • Mortgage insurance. With less than 20% down, PMI (or LMI in Australia) adds to the cost. Check your loan-to-value ratio with the LTV calculator.

Tip: run the numbers twice. Use the 28/36 setting to find a price that leaves breathing room, then plug that price into the mortgage calculator and check the repayment against your actual take-home pay. If you are still deciding whether to buy at all, the rent vs buy calculator compares the long-run cost of each.

How affordability is assessed in other countries

The maths of the loan is the same everywhere, so switch currency at the top of the page and the calculator works anywhere. The way lenders set the limit varies:

  • United States: front-end and back-end DTI ratios, as used here, plus your credit score and down payment.
  • Australia: lenders test repayments at a rate at least 3 percentage points above the actual rate (the APRA serviceability buffer) and use your real living expenses rather than a simple ratio. To mimic this, add 3 points to the rate.
  • United Kingdom: most lenders cap borrowing at around 4 to 4.5 times income, then run their own affordability checks on your outgoings.
  • Canada: lenders use gross debt service (GDS) and total debt service (TDS) ratios, the same idea as front-end and back-end DTI, and you must qualify at a stress-test rate above your actual rate.

Frequently asked questions

How much house can I afford on $85,000 a year?
With $400 a month of other debt, a $40,000 down payment, a 6.5% rate over 30 years and $4,800 a year of property tax and insurance, standard 31/43 lender rules put your ceiling at about $324,000. A more comfortable 28/36 budget is about $290,500. Change any of those numbers in the calculator and the range updates instantly.
What is the 28/36 rule?
It is a classic lending guideline: spend no more than 28% of your gross monthly income on housing (mortgage, property tax, insurance and HOA fees), and no more than 36% on all debts combined, including the new mortgage. Many lenders now approve higher ratios, so treat 28/36 as the comfortable end of the range rather than a hard limit.
Does this calculator include mortgage insurance (PMI)?
No. PMI depends on your credit score and loan type, so we leave it out of the maximum and flag it instead: if your down payment is under 20% of the price, a warning appears. PMI is part of your housing payment, so it lowers your real budget. Use the mortgage calculator to add a PMI figure from a lender quote.
Should I use gross or take-home income?
Enter gross (pre-tax) income, because that is what lenders use for their ratios. But plan your budget around take-home pay. A payment that is 31% of gross income can be 40% or more of what actually lands in your account, especially if you also save for retirement.
How can I afford a more expensive home?
Raise your income (or add a co-borrower), pay down monthly debts if the back-end limit is the one holding you back, save a bigger down payment, shop for a lower rate, or choose an area with lower property taxes. The insight under your results tells you which of these moves the needle most for your numbers.
Why does my lender say something different?
Lenders also look at your credit score, job history, savings, the exact tax bill on the home you choose, mortgage insurance and how they count variable income such as bonuses or self-employed earnings. Some apply a stress-test rate above the one you pay. This calculator gives a solid estimate; a pre-approval gives you the lender’s actual number.

This calculator gives estimates for education and planning. It is not financial advice, and your lender's figures may differ. See how we calculate.