The 28/36 Rule

This home affordability calculator caps your housing payment at the smaller of 28% of gross monthly income (front-end) or 36% minus existing debts (back-end). It then solves for the maximum loan that payment supports at your rate and term, adds the down payment, and applies PMI automatically when equity is under 20%.

From Payment to Price

The loan amount is the present value of the monthly payment stream: P × (1 − (1 + r)⁻ⁿ) ÷ r, where r is the monthly rate and n the number of payments. Property tax and insurance are deducted from the budget before the loan is solved, so the headline price is realistic.

Beyond the Number

Ratios are a starting point, not a guarantee — credit score, reserves, and local taxes matter too. Getting pre-approved gives you the definitive figure, and leaving buffer in the budget protects against rate changes and repairs.