What is the 28/36 rule?

It suggests spending no more than 28% of gross monthly income on housing (principal, interest, taxes, insurance) and no more than 36% on all debt payments combined. This calculator uses those ratios as affordability ceilings.

Why is my affordable price lower than I expected?

High existing debt, a high interest rate, or a small down payment all reduce the loan a given income can support. Lowering debts or raising the down payment lifts the ceiling.

Should I borrow the maximum?

Not necessarily. The rule ignores lifestyle costs, savings goals and emergencies. Many buyers choose a price below their maximum to keep monthly cash flow comfortable.

Why use gross income instead of net?

Lenders use gross monthly income because it is verifiable and consistent across applicants, while net income varies with personal tax situations and deductions. The 28/36 ratios are calibrated to gross income, so using net would understate your capacity and give an artificially low result.

Can I count bonuses or side income?

Only steady, documented income counts. One-off bonuses, irregular freelance work, or income without a two-year history is usually excluded or heavily discounted by underwriters, so leave it out of the figure you enter here.

Finance Calculators

Mortgage Affordability Calculator

Lenders gauge how much you can borrow with two classic thresholds: your housing payment should stay below about 28% of gross monthly income, and your total debt payments (housing plus all other debts) below about 36%. This calculator applies both limits to your income and existing debts, then works out the largest loan the surviving payment can support.

Add your down payment to the maximum loan to see the maximum home price you can reasonably target. The 28/36 rule is a conservative guideline, not a guarantee — lenders also weigh credit score, employment and reserves.

It is a quick gut-check before you start house-hunting, not a pre-approval — pair it with a real lender quote once you know your numbers.

Gross monthly income

Other monthly debts

Down payment

Annual interest rate%

Termyrs

Currency

Enter your values to see the result.

How this is calculated

This calculator applies the 28/36 guideline, a long-standing rule of thumb lenders use to screen borrowers. It sets two ceilings on your gross monthly income: roughly 28% for the total housing payment (principal, interest, taxes and insurance), and roughly 36% for all debt payments combined (housing plus car loans, student loans, minimum card payments and the like). The affordable monthly payment is the lower of those two ceilings after your other debts are subtracted.

With that payment in hand, the calculator works backwards through the loan amortisation formula to find the largest principal it could support at the rate and term you entered: loan = payment × ((1 + r)^n − 1) ÷ (r × (1 + r)^n), where r is the monthly rate and n the number of payments. Adding your down payment to that loan gives the maximum home price.

The model uses gross (pre-tax) income, assumes a fixed rate and a single term, and ignores closing costs, reserves, credit score, employment history and the taxes-and-insurance portion of the housing payment. It is a conservative screen, not a guarantee: underwriters weigh many factors the formula cannot see, and the 28/36 thresholds themselves vary by lender and market.

Worked example

Gross income $7,000/month, other debts $400/month, down payment $50,000, rate 6.5%, 30-year term.

1Housing ceiling: 7,000 × 0.28 = $1,960/month.
2Total-debt ceiling: 7,000 × 0.36 − 400 = $2,120/month.
3Affordable payment = the lower ceiling = $1,960/month.
4With r = 0.005417 and n = 360, max loan = 1,960 × 6.038 ÷ 0.0381 ≈ $310,400.
5Max home price = 310,400 + 50,000 = $360,400.

Frequently asked questions

What is the 28/36 rule?: It suggests spending no more than 28% of gross monthly income on housing (principal, interest, taxes, insurance) and no more than 36% on all debt payments combined. This calculator uses those ratios as affordability ceilings.
Why is my affordable price lower than I expected?: High existing debt, a high interest rate, or a small down payment all reduce the loan a given income can support. Lowering debts or raising the down payment lifts the ceiling.
Should I borrow the maximum?: Not necessarily. The rule ignores lifestyle costs, savings goals and emergencies. Many buyers choose a price below their maximum to keep monthly cash flow comfortable.
Why use gross income instead of net?: Lenders use gross monthly income because it is verifiable and consistent across applicants, while net income varies with personal tax situations and deductions. The 28/36 ratios are calibrated to gross income, so using net would understate your capacity and give an artificially low result.
Can I count bonuses or side income?: Only steady, documented income counts. One-off bonuses, irregular freelance work, or income without a two-year history is usually excluded or heavily discounted by underwriters, so leave it out of the figure you enter here.

Related calculators

Method: 28/36 affordability rule combined with the standard amortisation formula. No external data source. Last updated: September 2026.

These results are indicative estimates for planning only and do not constitute financial advice. Actual loan terms, tax rules, investment returns and product conditions vary by country, provider and your personal circumstances. Always confirm figures with your bank, tax authority or a qualified financial adviser before making decisions.