๐ How Much House Can You Afford?
US lenders use the 28/36 rule: your housing costs shouldn't exceed 28% of gross monthly income, and total debt shouldn't exceed 36%. This calculator applies that rule (plus your specific debts) to find your realistic budget.
๐ฏ The 28/36 Rule Explained
28% โ Housing Ratio
Mortgage P&I + tax + insurance + HOA should stay under 28% of gross monthly income.
36% โ Total Debt Ratio
All monthly debt (housing + cars + student loans + credit cards) under 36%.
๐ก Down Payment Impact
- 0โ5% down: FHA loans allowed, but PMI required
- 10% down: Better rates, still PMI
- 20% down: No PMI โ save $100โ300/month
- 25%+ down: Best mortgage rates from most lenders
โ ๏ธ Don't Stretch Your Budget
Just because a lender approves you for $600K doesn't mean you should spend it. Leave 10โ15% buffer for repairs, emergencies, and life changes.