How Much House Can I Afford 2025: Complete Calculator + Expert Analysis
Calculate exactly how much house you can afford with our interactive calculator. Complete guide to the 28/36 rule, debt-to-income ratios, and real-world affordability examples based on your income.
💡 Quick Answer
You can afford a home priced at 3-4× your annual income using the industry-standard 28/36 rule. According to Bankrate's 28/36 rule analysis, your housing costs should not exceed 28% of gross monthly income, and total debt should stay under 36%. Example: $100K salary = $300K-$400K home affordability.
Calculate Your Exact Affordability →📋 Complete Guide Contents
What is the 28/36 Rule?
The 28/36 rule is the industry-standard guideline used by mortgage lenders to determine home affordability. According to Chase Bank's mortgage guidelines, this rule ensures borrowers don't overextend themselves financially.
The Two Parts of the 28/36 Rule:
1. Front-End Ratio (28%)
Your monthly housing costs (PITI - Principal, Interest, Taxes, Insurance) should not exceed 28% of your gross monthly income.
Example: $6,000/month income × 28% = $1,680 maximum housing payment
2. Back-End Ratio (36%)
Your total monthly debt payments (housing + car + credit cards + student loans) should not exceed 36% of your gross monthly income.
Example: $6,000/month income × 36% = $2,160 maximum total debt
⚠️ Important Note:
The 28/36 rule is a guideline, not a law. Many lenders allow DTI ratios up to 43-45% for conventional loans, and FHA loans can go up to 50% with compensating factors. However, just because you're approved doesn't mean it's financially wise. Get pre-approved to see your exact limits.
Real-World Example: Amy's Home Purchase
Let's look at a real example from Chase's 28/36 rule guide:
Amy's Financial Situation:
| Gross Monthly Income | $6,000 |
| Existing Debts (car + credit cards) | $480/month (8%) |
| Maximum Housing Payment (28%) | $1,680/month |
| Maximum Total Debt (36%) | $2,160/month |
| Housing + Existing Debt | $1,680 + $480 = $2,160 (36%) |
✅ Result: Amy perfectly fits the 28/36 rule and would likely be approved for a mortgage with a $1,680/month payment.
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Calculate Your Home Affordability
Car loans, credit cards, student loans, etc.
Your Affordability Results:
Front-End Ratio: 28.0% (Target: 28%)
Back-End Ratio: 36.0% (Target: 36%)
How Much House Can I Afford by Income Level?
Here are real-world affordability examples based on the 28/36 rule at current 2025 mortgage rates (6.75% average):
$50,000 Annual Income
Monthly Budget
- • Gross Income: $4,167/month
- • Max Housing (28%): $1,167
- • Max Total Debt (36%): $1,500
Home Affordability
- • Home Price: $175,000-$200,000
- • Down Payment (5%): $8,750-$10,000
- • Closing Costs: $5,250-$6,000
- • Total Cash Needed: $14,000-$16,000
$75,000 Annual Income
Monthly Budget
- • Gross Income: $6,250/month
- • Max Housing (28%): $1,750
- • Max Total Debt (36%): $2,250
Home Affordability
- • Home Price: $260,000-$300,000
- • Down Payment (5%): $13,000-$15,000
- • Closing Costs: $7,800-$9,000
- • Total Cash Needed: $20,800-$24,000
$100,000 Annual Income
Monthly Budget
- • Gross Income: $8,333/month
- • Max Housing (28%): $2,333
- • Max Total Debt (36%): $3,000
Home Affordability
- • Home Price: $350,000-$400,000
- • Down Payment (5%): $17,500-$20,000
- • Closing Costs: $10,500-$12,000
- • Total Cash Needed: $28,000-$32,000
$150,000 Annual Income
Monthly Budget
- • Gross Income: $12,500/month
- • Max Housing (28%): $3,500
- • Max Total Debt (36%): $4,500
Home Affordability
- • Home Price: $525,000-$600,000
- • Down Payment (10%): $52,500-$60,000
- • Closing Costs: $15,750-$18,000
- • Total Cash Needed: $68,250-$78,000
7 Factors That Affect How Much House You Can Afford
1. Credit Score
Higher credit scores = lower interest rates = more affordability. A 100-point increase can save you $200-$300/month.
- • 760+: Best rates (6.5%)
- • 700-759: Good rates (6.75%)
- • 620-699: Higher rates (7.25%)
2. Down Payment Amount
Larger down payment = smaller loan = lower monthly payment = more affordability.
- • 20%: No PMI, best rates
- • 10%: Moderate PMI
- • 3-5%: Higher PMI costs
3. Interest Rates
Every 0.5% rate increase reduces affordability by ~$25,000 on a $300K home.
- • 6.0%: $1,799/month payment
- • 6.5%: $1,896/month payment
- • 7.0%: $1,996/month payment
4. Existing Debt
Every $100/month in debt reduces home affordability by ~$15,000-$20,000.
- • Car loans: $300-$600/month
- • Student loans: $200-$500/month
- • Credit cards: Minimum payments count
5. Property Taxes
Varies by location. High-tax states reduce affordability significantly.
- • Texas: 1.8% average ($450/month on $300K)
- • California: 0.76% ($190/month on $300K)
- • Florida: 0.98% ($245/month on $300K)
6. Homeowners Insurance
Costs vary by location, home value, and risk factors.
- • National average: $150-$250/month
- • High-risk areas: $300-$500/month
- • Flood/earthquake: Additional costs
7. HOA Fees
Homeowners Association fees reduce your buying power dollar-for-dollar.
- • Condos: $200-$600/month typical
- • Townhomes: $100-$300/month
- • Single-family: $50-$150/month (if any)
8. Loan Type
Different loan types have different DTI limits and requirements.
- • Conventional: 28/36 rule (up to 45% DTI)
- • FHA: Up to 50% DTI with compensating factors
- • VA: No set DTI limit (residual income test)
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