Where the 28% and 36% numbers actually come from
The 28/36 rule is a conventional mortgage underwriting guideline, not a law: your total housing payment (principal, interest, property tax, insurance, and HOA) shouldn’t exceed 28% of your gross monthly income, and your total debt obligations — housing plus car payments, student loans, and minimum credit card payments — shouldn’t exceed 36%. Lenders use versions of this to decide how much they’ll approve you for. It’s not a recommendation for how much you should actually spend.
How much house can I afford at my income?
The table below applies the 28/36 rule at several income levels, holding other debts at $450/mo, a $40,000 down payment, a 6.42% 30-year rate, 1.1% property tax, and $1,800/yr insurance constant — the same defaults loaded into the calculator above. Your own number will differ based on your actual debts and down payment; use the calculator for an exact figure.
| Gross monthly income | Affordable home price | Binding rule |
|---|---|---|
| $4,000 | $151,810 | 36% (total debt) |
| $5,000 | $201,915 | 36% (total debt) |
| $6,000 | $247,845 | 28% (housing) |
| $7,500 | $306,302 | 28% (housing) |
| $9,000 | $364,758 | 28% (housing) |
| $10,000 | $403,729 | 28% (housing) |
| $12,000 | $481,672 | 28% (housing) |
| $15,000 | $598,585 | 28% (housing) |
Notice which rule binds shifts as income rises: at lower incomes, the fixed $450/mo of other debt eats up a large enough share of the 36% ceiling that it caps the price first. At higher incomes, that same $450 becomes a smaller fraction of the budget, so the 28% housing-only rule becomes the binding constraint instead. Your own mix of income and existing debt determines which rule applies to you — the calculator above shows both.
Why two limits, and why the lower one wins
The 28% rule looks at housing in isolation. The 36% rule looks at your whole debt picture. Someone with no car payment and no student loans might be capped by the 28% rule first — their housing costs hit the ceiling before their total debt does. Someone carrying a car loan and student debt often gets capped by the 36% rule instead, since those existing payments eat into the room they have left for housing. The calculator above runs both and shows you which one is actually constraining your number — that’s the “binding constraint” line.
Understanding each input
Gross monthly income
Your income before taxes and other paycheck deductions — the figure lenders use for qualification math, not your take-home pay. This is deliberately not the same as what actually lands in your bank account.
Other monthly debt payments
Recurring minimum payments outside of housing — auto loans, student loans, minimum credit card payments, personal loans. This is what the 36% total-debt rule weighs against your income alongside the housing payment itself.
Down payment available
Cash you’ll put toward the purchase upfront. A larger down payment reduces how much you need to borrow, which directly raises the maximum home price the same monthly budget can support.
Mortgage rate & loan term
The rate and term determine how much of each dollar of your monthly housing budget goes toward principal versus interest — a higher rate means a smaller loan (and lower home price) fits inside the same monthly payment ceiling.
Property tax & insurance
Both count toward your housing payment under the 28% rule, alongside principal and interest. Since property tax scales with home value, it’s part of why this calculator solves for price directly rather than estimating tax on a guess.
HOA
Homeowners association dues, if applicable, also count as a housing cost under the 28% rule — a home with high HOA dues affords less purchase price for the same total monthly budget than an identical home with none.
Why property tax makes this a moving target
Property tax is a percentage of the home’s value, which means it scales with the price you’re trying to solve for — a more expensive home costs more to insure against and more to tax, which eats into how much house that same payment budget can actually support. This calculator solves for that directly rather than estimating tax on a rough guess of price, so the number reflects your actual local tax rate.
Approved for doesn’t mean comfortable at
Lenders will frequently approve buyers right up to the 36% line, but that’s a debt ceiling, not a comfort recommendation. Housing at 28% of gross income is 28% of income before tax — the number that actually leaves your account each month, after taxes, is a meaningfully larger share of your take-home pay. Plenty of financially comfortable homeowners spend well under what they were approved for, keeping room for savings, retirement contributions, and the unavoidable expenses that come with owning rather than renting.
Using this calculator
Enter your gross monthly income and your actual other debt payments — not what you wish they were. The down payment field matters more than it might seem: a larger down payment reduces the loan amount you need, which directly raises the maximum price the same monthly budget can support. Compare the affordable price here against actual listings in your target area to see how realistic your 28/36 ceiling is for the market you’re shopping in.
This article is for educational purposes only and isn't legal, financial, or tax advice. See our Disclaimer for details.
