★ MONEY · HOME BUYING · 28/36 RULE
On $120,000 a year, the front-end limit binds: you can afford a home up to $553,737.87 with a $110,747.57 down payment. Work out the most expensive home your income allows under the 28/36 rule — the max loan, the max price and the down payment — or run it backwards from a target price. This one is the HOW-MUCH-HOUSE tool — the max price from income by the 28/36 rule, with the reverse check — the mortgage-qualification-calculator page is the QUALIFICATION tool — the same limits with property tax, insurance and HOA inside the payment — not principal and interest alone; the mortgage-affordability-calculator page is the AFFORDABILITY tool — the 28/36 rule with tax, insurance, HOA and PMI counted — not the plain rule; and the loan-affordability-calculator page is the LOAN tool — the biggest loan payment you can carry — not the max home price. No how-much-house calculator exists on this site — this one is the first.
Work out the most expensive home your income allows under the 28/36 rule. On the defaults — $120,000 a year, $500 a month of other debts, 20% down, 6.5% over 30 years — the front-end limit binds at $2,800.00 a month and the max price is $553,737.87.
It means that, on the defaults, $553,737.87 is the most expensive home the 28/36 rule allows: a loan of $442,990.29 plus a down payment of $110,747.57. The rule works in two caps. The front-end cap says the housing payment may take at most 28% of gross monthly pay: $120,000 a year is $10,000 a month, and 28% of $10,000 is $2,800.00 a month. The back-end cap says the housing payment plus all other debts may take at most 36% of gross monthly pay: 36% of $10,000 is $3,600, less $500 of other debts, which is $3,100.00 a month. The lower cap binds — here the front-end one, $2,800.00 — and the loan is that cap divided by the amortization factor, the monthly payment on each dollar borrowed at 6.5% over 30 years. The price is the loan divided by what the loan has to cover: with 20% down, the loan is 80% of the price, so the price is $553,737.87.
Check which limit binds. On the defaults the front-end limit binds at $2,800.00 against a back-end cap of $3,100.00. Raise the other debts to $1,500 a month and the back-end cap falls to $2,100.00 — below the front-end cap — so the back-end limit binds and the max price falls to $415,303.40. The debts only matter once they are big enough to flip the binding limit, which is why clearing $500 of debts changes nothing here and clearing $1,500 changes everything. At $800 a month of debts the two caps tie at $2,800.00, and the front-end limit still wins the tie — the smallest debts where the back-end limit binds is $801 a month.
The down payment changes the price, not the loan. The loan is fixed by the binding cap: $442,990.29 on the defaults, whatever the down payment. What the down payment changes is how far that loan stretches — at 20% down it buys $553,737.87 of home, at 10% down it buys $492,211.44, and with no down payment at all it buys $442,990.29, the loan itself. A bigger deposit does not let you borrow more; it lets the same borrowing buy more house.
Run the reverse check before you fall for a listing. A $400,000 home with 20% down needs a $320,000 loan, and the P&I on that loan at 6.5% over 30 years is $2,022.62 a month. The front-end rule then needs $86,683.61 a year of income. If your income is below that, the listing is out of reach under the rule, however much you like the kitchen.
On the defaults: $120,000 a year, $500 a month of other debts, 20% down, 6.5% over 30 years.
And the other way: a $400,000 home needs a $320,000 loan and $2,022.62 a month of P&I, which needs $86,683.61 a year of income. And with $1,500 a month of other debts, the back-end cap is $2,100.00 a month and the max price is $415,303.40.
The defaults are $120,000 a year of gross income, $500 a month of other debts, 20% down, a 6.5% fixed rate over 30 years, and the standard 28% front-end and 36% back-end limits — chosen because they are the textbook case and the arithmetic is clean. They are a starting point, not a quote: the payment this page counts is principal and interest only. Property tax, homeowners insurance, HOA dues, PMI and closing costs are not in it — the mortgage-qualification-calculator page counts tax, insurance and HOA inside the payment, and the mortgage-affordability-calculator page counts those plus PMI. Lenders also apply their own limits, which are often higher than 28% and 36%, and they weigh credit score, employment history and reserves, none of which this tool sees. The rate is assumed fixed for the whole term.
These notes repeat in every explainer section because this page is built to be read start to finish: check which limit binds; the down payment changes the price, not the loan; and run the reverse check before you fall for a listing.
| Output | Formula | What it means |
|---|---|---|
| Front-end cap | 28% of monthly pay | $2,800.00. |
| Back-end cap | 36% of monthly pay − debts | $3,100.00. |
| Binding limit | the lower cap | front-end. |
| Max loan | binding cap ÷ amortization factor | $442,990.29. |
| Max price | loan ÷ (1 − down payment) | $553,737.87. |
| Down payment | price − loan | $110,747.57. |
| P&I | loan × amortization factor | $2,800.00. |
| Required income (reverse) | from a target price | —. |
| Verdict | in words | The front-end limit binds at $2,800.00 a month. |
| Reverse: Smallest income for a $600,000 max price | step | 131000: On $131,000 a year, the front-end limit binds: you can afford a home up to $604,497.17 (loan $483,597.74, down payment $120,899.43). |
| Reverse: Smallest monthly debts where the back-end limit binds | step | 801: On $120,000 a year, the back-end limit binds: you can afford a home up to $553,540.10 (loan $442,832.08, down payment $110,708.02). |
| Reverse: Largest whole-percent rate for a $500,000 max price | step | 7: On $120,000 a year, the front-end limit binds: you can afford a home up to $526,076.49 (loan $420,861.19, down payment $105,215.30). |
| Reverse: Smallest down payment for a $600,000 max price | step | 27: On $120,000 a year, the front-end limit binds: you can afford a home up to $606,836.02 (loan $442,990.29, down payment $163,845.73). |
| Reverse: Smallest front-end limit for a $600,000 max price | step | 31: On $120,000 a year, the front-end limit binds: you can afford a home up to $613,066.93 (loan $490,453.54, down payment $122,613.39). |
| Income $150,000 | same model | On $150,000 a year, the front-end limit binds: you can afford a home up to $692,172.34 (loan $553,737.87, down payment $138,434.47). |
| Debts $1,500/mo (back-end binds) | same model | On $120,000 a year, the back-end limit binds: you can afford a home up to $415,303.40 (loan $332,242.72, down payment $83,060.68). |
| Down payment 10% | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $492,211.44 (loan $442,990.29, down payment $49,221.14). |
| Rate 5.00% | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $651,985.66 (loan $521,588.53, down payment $130,397.13). |
| 15-year term | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $401,787.44 (loan $321,429.95, down payment $80,357.49). |
| Income $80,000 | same model | On $80,000 a year, the front-end limit binds: you can afford a home up to $369,158.58 (loan $295,326.86, down payment $73,831.72). |
| No other debts | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $553,737.87 (loan $442,990.29, down payment $110,747.57). |
| Rate 8.00% | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $476,992.23 (loan $381,593.78, down payment $95,398.45). |
| No down payment | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $442,990.29 (loan $442,990.29, down payment $0.00). |
| Rate 0% | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $1,260,000.00 (loan $1,008,000.00, down payment $252,000.00). |
| Income $0 | same model | Gross annual income — more than $0.. |
| Term 0 years | same model | Loan term — 1 year or more.. |
| Rate −1% | same model | Rate and other debts — $0 or above.. |
| Debts $3,600/mo (back cap $0) | same model | Your monthly debts use up the whole back-end limit — there is no room left for a housing payment.. |
| Debts $3,000/mo (binding $600) | same model | On $120,000 a year, the back-end limit binds: you can afford a home up to $118,658.11 (loan $94,926.49, down payment $23,731.62). |
| Rate 0% | same model | On $120,000 a year, the front-end limit binds: you can afford a home up to $1,260,000.00 (loan $1,008,000.00, down payment $252,000.00). |
| Down payment 100% | same model | Down payment — 0% or more, and less than 100% (a 100% down payment leaves no loan to work out).. |
| Down payment 110% | same model | Down payment — 0% or more, and less than 100% (a 100% down payment leaves no loan to work out).. |
| Front-end limit 0% | same model | DTI limits — between 0% and 100%.. |
| Income $1,000,000 | same model | On $1,000,000 a year, the front-end limit binds: you can afford a home up to $4,614,482.24 (loan $3,691,585.79, down payment $922,896.45). |
| Reverse: $400,000 target price | same model | Target price $400,000.00 ($80,000.00 down, loan $320,000.00): P&I $2,022.62/mo — needs $86,683.61 a year (front-end binds). |
Results are exact for the numbers you type: the caps, the amortization factor, the loan, the price and the down payment are computed to the cent from unrounded values, and the payment adds back to the binding cap exactly — the P&I is $2,800.00, which is the front-end cap. A note on the cents: because every figure is rounded for display, re-doing a step from a displayed figure can differ by a cent — the loan and the down payment add to $553,737.86 on paper, and the exact price is $553,737.87. The rule itself is the standard 28/36 guideline, not a lender's decision: lenders apply their own DTI caps, which are often higher, and they weigh credit score, employment history, reserves and the loan program. PMI is not included — with less than 20% down most loans carry it, and it would shrink the max price — closing costs are not included, taxes and insurance are not included, the rate is assumed fixed for the whole term, and income is assumed steady. It is an estimate for narrowing a search, not a pre-approval and not financial advice.
On $120,000 a year, the front-end limit binds: you can afford a home up to $553,737.87 (loan $442,990.29, down payment $110,747.57). Front-end cap $2,800.00 a month; back-end cap $3,100.00 a month. With $1,500 a month of other debts the back-end limit binds and the max price is $415,303.40 (loan $332,242.72). A $400,000 home needs a $320,000 loan, P&I $2,022.62 a month, and $86,683.61 a year. Smallest income for a $600,000 max price: 131000. Smallest monthly debts where the back-end limit binds: 801. Largest whole-percent rate for a $500,000 max price: 7. Smallest down payment for a $600,000 max price: 27. Smallest front-end limit for a $600,000 max price: 31. Source: Bright Side Kit, brightoolbox.com.
On $120,000 a year, with $500 a month of other debts, 20% down and a 6.5% rate over 30 years, you can afford a home up to $553,737.87 — a loan of $442,990.29 with a down payment of $110,747.57. The front-end limit binds at $2,800.00 a month.
The 28/36 rule says the housing payment may take at most 28% of gross monthly pay, and the housing payment plus all other debts may take at most 36%. On $120,000 a year that is a front-end cap of $2,800.00 a month and a back-end cap of $3,100.00 a month.
A $400,000 home with 20% down needs a $320,000 loan, P&I of $2,022.62 a month, and $86,683.61 a year of income under the front-end rule.
The back-end limit binds: the back-end cap falls to $2,100.00 a month and the max price falls to $415,303.40, with a loan of $332,242.72.
Yes — the loan stays $442,990.29, because the cap decides the loan, but the price rises: at 20% down the max price is $553,737.87 and at 10% down it is $492,211.44. A bigger deposit lets the same borrowing buy more house.
With no interest, the loan is the cap times the months: $2,800.00 × 360 is $1,008,000.00, and the max price is $1,260,000.00.
Because the front-end cap of $2,800.00 a month is lower than the back-end cap of $3,100.00 a month — and the lower cap always binds. The back-end cap only takes over when the other debts grow past $800 a month.
No — this page counts principal and interest only. The mortgage-qualification-calculator page counts property tax, insurance and HOA inside the payment, and the mortgage-affordability-calculator page counts those plus PMI.