Home Affordability Calculator 2025 — How Much House Can I Afford?

Income

Annual gross income (household)

Monthly debt payments

Car loans

Student loans

Credit cards / other debt

Mortgage details

Down payment

Mortgage rate

Loan term

yrs

Annual property tax (est.)

US average ~1.1%. Enter your local rate.

Homeowners insurance (annual)

Maximum home price

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28% rule—

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Housing ≤ 28% of gross income

36% rule—

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All debt ≤ 36% of gross income

MONTHLY PAYMENT BREAKDOWN

Mortgage (principal + interest)—

Property tax—

Homeowners insurance—

PMI (if < 20% down)—

Total monthly PITI—

PRICE RANGE TIERS

Conservative (28% rule)

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Moderate (36% DTI)

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Aggressive (43% DTI)

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Frequently asked questions

What is the 28/36 rule?

The 28/36 rule is a classic guideline used by lenders and financial planners. Your housing costs (mortgage + taxes + insurance) should not exceed 28% of your gross monthly income. Your total debt obligations (housing plus car, student, credit card payments) should not exceed 36% of gross monthly income. Lenders today often approve up to 43–50% DTI but staying at 36% or below gives you financial breathing room.

What is PMI and when do I need it?

Private Mortgage Insurance is required by most conventional lenders when your down payment is less than 20% of the home price. PMI protects the lender, not you. It typically costs 0.5–1.5% of the loan amount annually. On a $400,000 loan, that's $2,000–$6,000/year ($167–$500/month) until you reach 20% equity — at which point you can request cancellation.

What income do I need to buy a $500,000 home?

At 7.1% on a 30-year loan with 20% down ($100k), your mortgage payment is about $2,683/month. Add property tax ($500), insurance ($167) = ~$3,350/month in PITI. Using the 28% rule, you'd need a gross monthly income of ~$11,964, or $143,571/year. With existing debts, the required income rises further.

Should I put 20% down?

Putting 20% down eliminates PMI, lowers your monthly payment, reduces total interest paid, and shows lenders you're a lower-risk borrower. However, it also ties up a large amount of cash. If putting 20% down depletes your emergency fund or investment accounts, a lower down payment with PMI may be the smarter short-term choice — especially if home prices are rising quickly in your market.

Home Affordability in 2025 — How the 28/36 Rule Works in Practice

With mortgage rates hovering around 7%, the maximum home price most households can afford has dropped significantly from the 3% rate era. Someone who could afford a $500,000 home at 3% can now only afford about $350,000 at 7% — a 30% reduction in purchasing power from rate increases alone.

Affordability by Income — 2025 Numbers

Household Income	Max Home Price (28%)	Monthly PITI	Min Down (20%)
$60,000/yr	$170,000	$1,400	$34,000
$80,000/yr	$225,000	$1,867	$45,000
$100,000/yr	$280,000	$2,333	$56,000
$150,000/yr	$425,000	$3,500	$85,000
$200,000/yr	$565,000	$4,667	$113,000

*Based on 7.1% mortgage rate, 30-year term, 1.2% property tax, $2,000/year insurance, 20% down. Assumes no existing debt.

PMI: The Cost of Less Than 20% Down

Private Mortgage Insurance (PMI) is required on conventional loans when you put down less than 20%. It protects the lender — not you. Typical PMI costs 0.5–1.5% of the loan amount annually.

Down Payment	PMI Rate	Monthly PMI ($350k home)	Until equity reaches
3% ($10,500)	1.2%	$388/mo	20% (~11 yrs)
5% ($17,500)	1.0%	$329/mo	20% (~10 yrs)
10% ($35,000)	0.7%	$220/mo	20% (~7 yrs)
20% ($70,000)	None	$0	N/A

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Frequently asked questions

Home Affordability in 2025 — How the 28/36 Rule Works in Practice

Affordability by Income — 2025 Numbers

PMI: The Cost of Less Than 20% Down

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