How much house you can afford

A lender’s ratio is a cap on the payment they will count. It is not a measure of whether the house will still feel affordable after repairs, furniture, and a thinner emergency fund.

Finance Calculator Pro team·Updated October 14, 2026·3 min read

The 28/36 illustration

A common classroom pair is the front-end ratio (housing payment ÷ gross monthly income) at 28% and the back-end ratio (housing plus other monthly debts ÷ gross income) at 36%. The affordability calculator takes the tighter leftover dollars, subtracts the taxes, insurance, and PMI you type, inverts the remainder into a loan, and grosses that loan up by the down-payment percent to a price.

housing = min(0.28 × gross monthly, 0.36 × gross monthly − other debts)
available P&I = housing − taxes − insurance − PMI − HOA
price = loan / (1 − down-payment percent)

What lenders actually use

The CFPB defines a debt-to-income ratio and explains that mortgage DTI usually includes the projected housing payment. Ability-to-repay and qualified-mortgage requirements live in 12 CFR 1026.43. The current general QM is not “everyone must be under 36%.” Conventional files also pass through investor overlays; Fannie Mae’s Selling Guide is the public conventional reference this site links, without quoting a single DTI ceiling as if it were universal.

Automated underwriting can accept a higher DTI with compensating factors, or reject a file that “fits” 28/36 because of credit, reserves, or property issues. Residual-income tests (common on some VA files) ask what is left after debts, not only the ratio; 38 CFR 36.4340 is the VA residual-income underwriting standard. Treat 28/36 as a conservative sketch.

Read the CFPB DTI explainer for the definition, not for a promise about your file.

Housing cost is more than P&I

Taxes, insurance, flood, HOA, and PMI can consume the housing cap before principal gets a turn. The CFPB notes that conventional PMI is commonly required below 20% down; cancellation thresholds are on the CFPB PMI-removal page, not the “what is PMI” explainer. Enter PMI as a monthly dollar on the affordability and mortgage calculators if that is your structure. Insurance and tax lines in the affordability tool do not automatically scale with the price it outputs — if the price jumps, revisit those extras.

Maintenance, utilities, and commuting do not appear in DTI. A “max price” that ignores them is a lending sketch, not a household budget.

Cash to close is a second cap

Down payment plus closing costs plus prepaid items plus reserves can bind before the ratio does. Gift funds, down-payment assistance, and seller credits have their own documentation rules. The affordability calculator reports a down-payment dollar that is only a percent of the computed price. A Loan Estimate is the document that lists cash to close. The CFPB closing page walks through that disclosure.

Rate and term move the price

The same $2,380 of P&I buys less house when the rate is higher or the term is 15 years instead of 30. Compare terms on the 15 vs 30 guide and against a current FRED 30-year average if you need a public snapshot of the rate environment — not a lock.

How to use the number

Run the affordability calculator with conservative extras. Take a price below the cap, not at it. Put that price into the mortgage calculator with taxes, insurance, and PMI. If the total payment crowds out savings, the ratio was not the binding constraint — your budget was. That gap is the point of doing both.

This guide is not a pre-approval and not financial advice. A lender can decline a file that fits the sketch, and a household can be house-poor on a file that was approved.