How Much House Can You Afford? Mortgage Payment Basics

By the Tool Goodie Team · Updated July 4, 2026 · 6 min read

A widely used guideline is to keep your total monthly housing payment at or below 28% of your gross monthly income — and all your debt payments combined under 36%. That's the "28/36 rule." But how much house that translates to depends on your down payment, interest rate, and the taxes and insurance in your area. Here's how the pieces fit together so you can estimate a realistic budget.

Key takeaways

The 28/36 rule: housing ≤ 28% of gross monthly income; total debt ≤ 36%.
A mortgage payment is PITI: principal, interest, taxes, insurance (plus PMI under 20% down).
Down payment, rate, and term all change what you can afford.
Estimate a full payment with the mortgage calculator.

The 28/36 rule

Lenders and financial advisors often use two ratios to judge affordability:

28% (front-end): your total monthly housing payment shouldn't exceed 28% of your gross (pre-tax) monthly income.
36% (back-end): all your monthly debt payments — housing plus car loans, student loans, credit cards — shouldn't exceed 36%.

For example, on a $6,000 gross monthly income, 28% is about $1,680 for housing, and 36% is $2,160 for all debt. These are guidelines, not laws — some loan programs allow higher ratios, and your own comfort level matters more than any rule.

What's actually in a mortgage payment (PITI)

The monthly figure is more than principal and interest. It's usually PITI:

Principal — the part that pays down your loan balance.
Interest — the cost of borrowing.
Taxes — property tax, often collected monthly into an escrow account.
Insurance — homeowners insurance, also usually escrowed.

If your down payment is under 20%, add PMI (private mortgage insurance). Some properties also carry HOA fees. When you compare your budget to the 28% rule, use the full PITI figure — not just principal and interest — because that's what actually leaves your account.

Estimate your payment: the free Mortgage Calculator works out the full monthly PITI from a home price, down payment, rate and term — including property tax, insurance and PMI — so you can see what fits your budget.

The levers that change what you can afford

Down payment. A bigger one shrinks the loan and can eliminate PMI, lowering the payment two ways at once.
Interest rate. Even half a percent noticeably changes the monthly payment and the total you'll pay over 30 years — shop lenders.
Loan term. A 30-year loan has a lower monthly payment than a 15-year, but you pay far more interest over time.
Property taxes & insurance. These vary a lot by location and can swing the affordable price meaningfully.

This article is for general education only and is not financial advice. Affordability depends on your full financial picture, and lenders use their own criteria. Figures here are estimates that exclude closing costs and assume a fixed rate. Consult a qualified mortgage professional or financial advisor before making decisions.

Frequently asked questions

What percentage of income should go to a mortgage?

A common guideline is the 28/36 rule: keep your total housing payment at or below 28% of gross monthly income, and all debt payments at or below 36%. These are guidelines, not hard limits.

What is included in a mortgage payment?

A typical monthly payment is PITI: principal, interest, property taxes and homeowners insurance. If your down payment is under 20%, private mortgage insurance (PMI) is usually added too, and some homes also have HOA fees.

How does the down payment affect affordability?

A larger down payment lowers the loan amount and monthly payment, and a down payment of 20% or more usually avoids PMI, reducing the payment further.