How Much House Can I Afford? The 28/36 Rule With Real Numbers
How lenders use the 28/36 rule, what it means at $60k to $200k incomes, and when to aim lower than the maximum.
CalciTools Editorial · · 7 min read
The 28/36 rule is the starting point most lenders use: keep your housing payment under 28% of gross monthly income and all debt payments under 36%. “Housing payment” means principal, interest, property tax, homeowners insurance, PMI and HOA dues — not just the mortgage.
What the rule allows at different incomes
| Household income | Max housing payment (28%) | Home price | Down payment |
|---|---|---|---|
| $60,000 | $1,400/mo | $187,000 | $30,000 |
| $80,000 | $1,867/mo | $257,000 | $40,000 |
| $100,000 | $2,333/mo | $327,000 | $50,000 |
| $150,000 | $3,500/mo | $502,000 | $75,000 |
| $200,000 | $4,667/mo | $677,000 | $100,000 |
Assumes $400/month other debt, 6.5% 30-year fixed, 1% property tax, $2,000/year insurance, 0.6% PMI under 20% down, down payment equal to half a year’s income.
Three things that move the number most
1. Your interest rate
At $100,000 of income, a 6.5% rate supports about $327,000. At 7.5%, the same budget buys about $305,000 — $22,000 less house for the same monthly payment.
2. Your other debts
The 36% limit counts car loans, student loans and card minimums. Raising other debts from $400 to $900 a month cuts the price from $327,000 to $297,000. Paying off a car before applying can raise your budget more than saving a bigger down payment.
3. Property tax and insurance
Effective property tax rates range from under 0.5% of value in parts of the South and West to over 2% in New Jersey and Illinois, and insurance premiums have risen sharply in storm-prone states. These costs come out of the same 28%, so a high-tax county buys noticeably less house.
Should you buy at the maximum?
The rule describes what a lender will usually approve, not what leaves room for the rest of your life. Plan for maintenance of about 1% of the home’s value a year, keep retirement contributions going, and compare the full payment with what actually lands in your account using the take-home pay calculator. Then run your numbers in the affordability calculator.
Frequently asked questions
Is the 28/36 rule based on gross or net income?
Gross (pre-tax) income. That’s why the rule can feel generous: 28% of gross pay is often 35% to 40% of take-home pay.
Can I get approved above 36%?
Often, yes. FHA loans commonly allow 43% total debt-to-income, and conventional loans can go to about 45%–50% with strong credit and cash reserves. Being approved for a payment doesn’t mean it fits your budget.
What’s the minimum down payment?
Conventional loans allow 3% down for some first-time buyers, FHA requires 3.5% with a 580+ credit score, and VA and USDA loans can require 0%. Below 20% down on a conventional loan you’ll pay PMI.
Sources
Estimates for planning, not financial, tax or legal advice. CalciTools calculators use published government figures and the assumptions shown on each page. Your actual numbers depend on details we don’t model. Check important decisions with a qualified professional.