Free House Affordability Calculator

The 28/36 rule is the conventional mortgage underwriting heuristic: your housing costs (PITI) should be 28% or less of your gross monthly income (front-end DTI), and your total monthly debts including PITI should be 36% or less (back-end DTI). It comes from decades of default-rate analysis showing that borrowers within these ratios are dramatically less likely to default. The Fannie Mae Selling Guide codifies these ratios as the conventional thresholds.

Yes — it's the conventional underwriting baseline, but lenders apply it with judgment. Strong borrowers (high credit score, large down payment, significant assets) often get approved above 36% back-end. FHA loans typically allow up to 43% back-end and sometimes 50%. VA loans use a residual-income test instead. But 28/36 is still the right planning number — staying inside it keeps the most loan options open and produces the lowest interest rates.

Lenders include any debt that shows up on your credit report with a required monthly payment: car loans, student loans, minimum credit card payments (not the full balance), personal loans, and other mortgages. They do NOT include: utilities, groceries, subscriptions, gym memberships, child care, or anything not on your credit report. Alimony and child support payments are typically included if they're court-ordered.

Pre-approval letters often use generous assumptions — they may apply a 43% or even 50% back-end DTI cap, exclude PMI from the affordability test, or use a lower property tax estimate. This calculator uses the conventional 28/36 caps that minimize default risk. The pre-approval ceiling is the lender's ceiling; your sensible ceiling is usually 10–20% lower. Staying below your pre-approval limit also leaves margin for closing costs, moving expenses, and the inevitable post-move purchases.

Property tax is part of PITI and reduces your borrowing power dollar-for-dollar. A 1.1% tax rate on a $400,000 home adds $367/month — that's roughly $50,000–$60,000 of mortgage principal you can't borrow. High-tax states (NJ, IL, NH, TX) cut affordability significantly versus low-tax states (HI, AL, CO, LA). Use your county's actual rate, not a national average.

Putting 20% down avoids PMI (typically $80–$400/mo on a $300k loan), gets you better rates, and gives you instant equity. But waiting 2–3 years to save the extra 5–10% means missing 2–3 years of price appreciation in most markets. The math often favors buying sooner with 5–10% down and accepting PMI for the first few years until your equity hits 20% and PMI cancels. Run both scenarios with this calculator to see which produces the better outcome for your timeline.

Rates can move 0.5–1% between your pre-approval and your closing — sometimes more in volatile markets. The stress test recomputes your max home price assuming rates rise 1% before you lock. The gap between your normal max and your stressed max is the buying power at risk. If the gap is small ($10k–$20k), you have flexibility. If it's large ($50k+), shop for a lower-priced home or lock your rate early.

No. Every calculation runs entirely in your browser. Your income, debts, and down payment never leave your device. Nothing is logged, uploaded, or tracked. The URL contains your inputs so you can share a scenario with your spouse — but only the link recipient sees it; nobody at FT2G ever does.