The 28/36 rule
Lenders in the U.S. often look at two ratios of your gross (before-tax) monthly income:
- Front-end (28%): your total housing cost (mortgage, property tax, insurance, HOA, PMI) should be at most 28%.
- Back-end (36%): housing plus all other monthly debts (car, student loans, credit cards) should be at most 36%.
The calculator uses whichever limit is lower. Some loan types allow higher ratios, so you can change both percentages.
What is included in the payment
- Principal and interest on the mortgage.
- Property tax as a percentage of the price. The U.S. average is roughly 1%, but it varies a lot by state and county.
- Home insurance and any HOA dues.
- PMI when your down payment is under 20%.
Beyond the monthly payment
Budget for closing costs (commonly 2–5% of the price), moving, repairs and an emergency fund. A home you can technically qualify for may still feel tight, so many buyers aim below the maximum.