Lenders use the 28/36 rule. Housing costs stay under 28 percent of gross monthly income, and all debt payments together stay under 36 percent. Housing here means the full payment including taxes and insurance, not just principal and interest.
What a lender will approve and what leaves you comfortable are different numbers. Approval is based on gross income, and you live on net.
Total housing cost stays at or below 28 percent of gross monthly income, and total debt payments including the mortgage stay at or below 36 percent. On $8,000 of gross monthly income that is $2,240 for housing and $2,880 for everything with a minimum payment.
It changes the price you can reach, not the monthly payment you can carry. A larger down payment also removes private mortgage insurance once you pass 20 percent equity, which is often worth more per month than the interest saved.
Lenders qualify you on gross income and only count debts that appear on a credit report. Childcare, retirement contributions, insurance and the actual cost of maintaining a house are invisible to that calculation and very visible to you.
A common planning figure is 1 to 2 percent of the home's value a year for maintenance and repairs, on top of property tax and insurance. On a $400,000 house that is $4,000 to $8,000 a year that no mortgage calculator shows you.
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The house price the 28% and 36% rules allow, the rent the 30% rule allows, and the salary you'd need for the place you actually want.
Adjust the inputs to explore different scenarios.
See what your numbers mean, then compare your options.
House you can afford on $80,000/yr
$289,738
28% rule — housing costs only
Salary for your dream house
Flip it around: type the price of the house you actually want, and see the salary the 28% rule says you'd need — at the same down payment, rate and term above.
Salary you'd need
$138,056/yr
That's $3,221/mo of housing cost ($2,555/mo of it principal + interest).
The 28% rule (front-end ratio): spend no more than 28% of your gross monthly pay on housing. The 36% rule (back-end ratio): everything you owe each month — housing plus car payments, student loans, credit cards — should stay under 36% of gross pay, so existing debts eat into what's left for a mortgage. The 30% rule is the renting version: keep rent under 30% of gross pay. All three use pay before tax, which is why the numbers can feel generous next to what actually lands in your account.
The mortgage math is the standard amortization formula: monthly payment = P × r(1+r)n / ((1+r)n − 1), where P is the loan, r is the yearly rate divided by 12, and n is the number of months. We run it backwards — take the monthly payment the rule allows, solve for the biggest loan that fits, then divide by (1 − your down payment %) to get the house price. At a 0% rate the loan is simply split evenly across the term.
By default the allowance also covers estimated property tax and home insurance, since that's how lenders apply the ratio — uncheck that box and the whole 28% (or 36%) goes to principal and interest, which produces a noticeably bigger house. Either way this excludes HOA and condo fees, PMI on a down payment under 20%, closing costs, maintenance, and utilities, and it assumes a fixed-rate loan.
This is a rough estimate for orientation, not financial advice, and not a lending decision — a lender will also weigh your credit score, savings, and job history. Your numbers never leave your browser: nothing you type here is stored, sent, or tracked. Want to know what you're really spending each month before you commit to a payment? Deco tracks it automatically.