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How Much House Can You Afford?

The 28/36 rule lenders actually use, run on your income and debts — a price range, not a promise.

Run your numbers Arithmetic, not underwriting

Gross annual income $ Pre-tax, the way lenders quote it — most other ClariFi calculators use take-home

Monthly debt payments $ Car, student loans, card minimums — not rent or utilities

Down payment saved $

Interest rate % 6.5% — a typical recent rate, not an offer; yours will differ

✓ Healthy — 34% of gross income Comfortable price$355,327 Housing budget /mo$2,333

Stretching to the 36% ceiling: $376,422.

Housing budget
Monthly debts
Everything else — housing + debts must stay under the 36% line

The bar is your gross monthly income. Lenders cap the orange slice at 28% and the first two together at 36% — the default lands at 34%, two points under the ceiling.

How it works

The 28/36 rule is the oldest screen in mortgage lending: housing costs should stay under 28% of your gross monthly income (the front-end ratio), and housing plus every other debt payment should stay under 36% (the back-end ratio). Whichever cap is tighter wins. It's a rule of thumb, but it's a rule of thumb lenders genuinely start from, which makes it the honest way to turn a salary into a price range before anyone pulls a credit file.

The defaults walk through it. $100,000 a year is $8,333 a month gross. The 28% front-end cap allows $2,333 for housing; the 36% ceiling minus $500 of existing debt payments leaves $2,500 — so the front end binds and the housing budget is $2,333. Reserve 20% of that for property tax and insurance, and the remaining $1,867 of principal-and-interest carries a loan of about $295,327 at 6.5% over 30 years. Add the $60,000 down payment and the comfortable price is $355,327. Let debts shrink toward the 36% ceiling instead and the stretch price is $376,422 — the calculator shows both, because the gap between comfortable and maximum is exactly where house-poor happens.

One deliberate oddity: this page uses gross income, because that's the convention the 28/36 ratios were written against and the number a lender will quote back to you. Most other ClariFi calculators — rent, 50/30/20, the Flex Budget — use take-home, because that's what you actually spend. Both are right; they're just answering different questions.

The formula

gm         = $100,000 ÷ 12 = $8,333 gross per month
front 28%  = 0.28 × $8,333 = $2,333            housing cap
back 36%   = 0.36 × $8,333 − $500 = $2,500     room after debts
budget     = min(front, back) = $2,333
P&I budget = $2,333 × 0.80 = $1,867            20% reserved for tax + insurance
loan       = P&I × (1 − (1 + r)⁻³⁶⁰) ÷ r ≈ $295,327      r = 6.50% ÷ 12
price      = loan + down = $295,327 + $60,000 = $355,327

Honest assumptions

28/36 is a rule of thumb, not a law — actual thresholds vary by lender and loan type, and some programs allow back-end ratios into the 40s.
20% of the housing budget is reserved for property tax and insurance; the rest goes to principal and interest on a fixed 30-year term.
The 6.5% rate is an example, not an offer — a single point of rate moves the price by tens of thousands, so re-run it with a real quote.
Lenders also weigh credit score, cash reserves, employment history, and the property itself — none of which this page can see.
This page is arithmetic, not underwriting — a price range to plan around, not a prequalification.

Questions people ask

What is the 28/36 rule?

Two caps, measured against gross monthly income: housing costs (payment, taxes, insurance) under 28%, and housing plus all other debt payments — car loans, student loans, card minimums — under 36%. Lenders use the pair as a first-pass screen for whether a payment is sustainable. Whichever cap is tighter sets your budget; with high existing debts the 36% side binds long before the 28% side does.

Why does this calculator use gross income?

Because the 28/36 ratios were calibrated on gross income and that's how every lender will run them — using take-home here would make the result impossible to compare with what a loan officer tells you. The flip side is worth saying out loud: 28% of gross is a bigger bite of your real spending money than it sounds, since taxes and withholding come out first. If a payment only works on gross math, it doesn't work.

How much does a bigger down payment change the price?

Dollar for dollar, at minimum: your monthly budget carries the same loan either way, so every extra $10,000 down is $10,000 more house. It can be worth more than that in practice — reaching 20% down removes PMI, a monthly premium this page doesn't model, which frees up budget that then carries a bigger loan. Down payment is the one input here you fully control.

How do lenders use DTI?

The back-end ratio in this calculator is a debt-to-income ratio — DTI. Lenders treat 36% as the comfortable zone, and many loan programs draw a hard line around 43%, which is why the verdict chip above flips from healthy to stretched to over-the-ceiling at those marks. To see your DTI on its own, with every debt itemized, use the DTI calculator.

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ClariFi makes tools, not advice. Nothing on this page is a recommendation to buy, sell, or sign anything.

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