LOANS & MORTGAGES CHANNEL
Home Affordability Calculator
Calculate your home buying budget using the standard financial 28/36 rule.
Calculator Variables
Calculation Overview
Determine your home purchasing power using verified lender debt-to-income (DTI) qualification guidelines.
Mathematical Model & Formula
Max Monthly Mortgage = min(Income * 0.28, (Income * 0.36) - Debts)
Uses standard conservative banking underwriting ratios to calculate maximum housing payments.
Variables Defined:
Worked Example Scenario
Scenario: Income of $10,000/month, debt of $500/month.
- Front end: $10,000 * 0.28 = $2,800
- Back end: ($10,000 * 0.36) - $500 = $3,100
- Max payment is $2,800
Result: Maximum monthly payment of $2,800 is allowed.
Frequently Asked Questions
What is the 28/36 rule?
Lenders recommend that your housing costs not exceed 28% of your gross income, and total debt payments not exceed 36%.