How we worked it out
Updated as you change the numbers.
- Monthly income = $10,000.00. Housing limit 28% = $2,800.00; total-debt limit 36% − $600.00 debts = $3,000.00.
- The lower, $2,800.00, has to cover principal, interest, tax, insurance and HOA.
- Solving for the price that fits gives $443,983.25.
Method and assumptions
The calculator takes the lower of two limits: housing costs at the front-end ratio of gross monthly income, and housing plus other debts at the back-end ratio. It then finds the home price whose payment (principal, interest, property tax, insurance and HOA) equals that amount. Lenders’ limits vary by loan type and credit; FHA and VA loans can allow higher ratios.
Questions
How much house can I afford on $120,000 a year?
With $600 of other debts, 20% down and a 6.5% rate, the 28/36 rule allows about $2,800 a month for housing: a home of roughly $444,000.
Sources
Method and figures checked on . Every worked answer on this page is covered by an automated test. Found a mistake? Tell us.