How much house can you afford?
Based on the widely used 28/36 rule of thumb for housing affordability. Lending criteria vary by country — see notes below.
Your Estimated Budget
$335,327
This includes your down payment of $40,000 and a maximum loan of $295,327.
Max Monthly Payment
$2,333
Target DTI Ratio
34.0%
The 28/36 Rule Explained
The 28% Rule (Housing)
Lenders prefer that your housing expenses (mortgage, taxes, insurance) don't exceed 28% of your gross monthly income. Your limit: $2,333/mo.
The 36% Rule (Total Debt)
Your total monthly debt payments (housing + existing debts) shouldn't exceed 36% of your gross income. Your limit: $2,500/mo.
How affordability is judged around the world
- United States: 28% front-end / 36% back-end debt-to-income (this calculator's defaults).
- Canada: Gross Debt Service ≤ 32%, Total Debt Service ≤ 40%.
- United Kingdom: Lenders typically cap loans at ~4.5× annual income.
- Australia / New Zealand: ~30% of pre-tax income on housing is the common "stress" threshold.
- Eurozone: Many lenders cap monthly housing payments at ~33% of net income.