Home Budget Calculator
Use the 28/36 rule, the same standard mortgage lenders apply, to find your safe housing budget. Enter your income and existing debts to see your maximum home price.
1 Monthly Income
2 Existing Monthly Debt Payments
3 Loan Assumptions
Safe Home Budget
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Enter your income and loan details above
Max Housing Payment
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Down Payment Needed
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Front-End DTI Limit
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28% of gross income
Back-End DTI Limit
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36% of gross income
Affordability Assessment
Safe
Debts < 15% of income
Borderline
Debts 15–28% of income
Risky
Debts > 28% of income
Monthly Income Allocation
Home Price Scenarios
At different down payment levels
| Down Payment | Max Home Price | Cash Needed | Monthly P&I |
|---|---|---|---|
| Enter income details above | |||
How the 28/36 Rule Works
The 28/36 rule is the standard debt-to-income (DTI) guideline used by conventional mortgage lenders. It has two parts:
- Front-end DTI (28%) — Your total housing payment (principal, interest, taxes, insurance) should not exceed 28% of your gross monthly income.
- Back-end DTI (36%) — All monthly debt payments combined (housing + car loans, student loans, credit cards) should not exceed 36% of gross income.
Your binding limit is the lower of the two — if existing debts are high, your back-end DTI constrains how much housing payment you can take on even if your income is high.
What's Included in the Housing Payment?
Lenders use PITI: Principal + Interest + Taxes + Insurance. This calculator estimates taxes and insurance as a combined $450/month escrow. For a precise number, use the Property Tax Calculator for your state and add your homeowner's insurance quote.
Beyond the 28/36 Rule
The 28/36 rule is a conservative guideline — FHA loans allow back-end DTI up to 43%, and some lenders approve up to 50% with strong compensating factors (large reserves, excellent credit). But staying within 36% protects your financial flexibility, especially for homeownership expenses that don't show up in a mortgage payment (maintenance, repairs, HOA).
Once you know your budget, use the Affordability Calculator for a detailed purchase analysis, or the Mortgage Calculator to model your exact monthly payment.
Frequently Asked Questions
What percentage of income should go to housing?
A common guideline is 28% of gross income for housing, or about 25–30% of take-home pay if you want room for saving. High-cost areas often push this higher, which makes the rest of the budget tighter.
What is the 50/30/20 budget rule?
It splits take-home pay into 50% needs (housing, utilities, groceries, insurance, minimum debt payments), 30% wants and 20% savings and extra debt repayment.
What costs of owning a home do people forget?
Maintenance (plan on 1–2% of the home's value a year), higher utilities, HOA dues, property tax and insurance increases, and replacing big items like the roof, HVAC or water heater.
How big should my emergency fund be as a homeowner?
Aim for 3–6 months of essential expenses, including the full mortgage payment, kept separate from your down payment and closing cost money.