Last updated 23 August 2026
The 28% / 36% rule
Lenders commonly cap housing costs at 28% of gross monthly income (the front-end ratio), and total debt payments — housing plus everything else — at 36% (the back-end ratio). This calculator works out both limits and uses whichever is smaller, since that's the one that actually constrains the loan a lender would approve.
From that maximum monthly payment, the calculator works backward through the standard loan formula to find the largest loan that payment could support, then adds the down payment to get an estimated affordable home price.
Common questions
What are the 28% and 36% rules?
Standard lending guidelines: housing costs shouldn't exceed 28% of gross monthly income (the front-end ratio), and total debt payments including housing shouldn't exceed 36% (the back-end ratio). Lenders use both and apply whichever is more restrictive.
Why does existing debt reduce how much home I can afford?
The 36% back-end limit covers all debt, not just housing. A car loan or student loan payment eats into that 36%, leaving less room for a mortgage payment even if income alone would support a bigger one.
Is this the same number a lender will approve?
It's a reasonable estimate using the guidelines most lenders reference, but actual approval depends on credit score, employment history and the specific lender's own criteria — treat this as a planning starting point, not a pre-approval.