Question 1

How much house can I afford on my salary?

Accepted Answer

A common guideline is the 28/36 rule: your total monthly housing payment should not exceed 28% of your gross monthly income, and all of your debt payments combined should not exceed 36%. This calculator applies both limits and uses the lower of the two to estimate a comfortable home price. Many financially cautious buyers aim even lower — closer to 25% of take-home pay — to leave room for saving and investing.

Question 2

What is included in a monthly mortgage payment?

Accepted Answer

A mortgage payment is often called PITI: Principal, Interest, Taxes, and Insurance. Principal and interest pay down the loan itself, while property taxes and homeowners insurance are typically collected monthly and held in escrow. If your down payment is under 20%, you may also pay private mortgage insurance (PMI), and some homes have HOA fees on top.

Question 3

How much should I put down on a house?

Accepted Answer

A 20% down payment is the traditional benchmark because it lets you avoid private mortgage insurance (PMI) and lowers your monthly payment. That said, many loan programs allow as little as 3–5% down. A larger down payment means a smaller loan, less interest paid over time, and a lower monthly payment — but don't drain your emergency fund to get there.

Question 4

Why is the amount a lender approves higher than what I can afford?

Accepted Answer

Lenders calculate what you qualify for based on gross income and standard ratios. They don't see your other goals — retirement saving, childcare, travel, or how much margin you want in your budget. The 'approved' number is a ceiling, not a target. Buying at the top of your approval range is how people end up 'house poor.'

Question 5

Does this calculator account for property taxes and insurance?

Accepted Answer

Yes. You can set a combined property-tax-and-insurance rate as a percentage of the home's value per year (1.5% is a reasonable national starting point, but it varies widely by location). The calculator folds that cost into your monthly payment when estimating how much home you can comfortably afford.

Mortgage Affordability Calculator

Your numbers

Monthly payment breakdown

Frequently asked questions