Mortgage Affordability Guide
How much house you can really afford — beyond what a lender will approve — using the 28/36 rule and total cost of ownership.
The 28/36 rule
Housing costs (PITI) should stay under 28% of gross monthly income. Total debt payments should stay under 36%. Lenders sometimes approve higher — that doesn’t mean you should borrow it.
True cost of ownership
Beyond principal and interest: property tax, homeowners insurance, PMI, HOA, maintenance (budget 1–2% of home value/year), and utilities that scale with square footage.
Frequently asked questions
Do I need 20% down?
No. Conventional loans allow 3–5% down, FHA 3.5%, VA 0%. Sub-20% loans require PMI or MIP until you reach ~78% loan-to-value.
Bottom line
Understanding mortgage affordability guide is one of the highest-leverage things you can do for your financial future. Bookmark this guide, share it with a friend, and use the calculators linked below to run the math on your own numbers. Money decisions are rarely urgent, but they compound — so a good decision today easily becomes an outsized win a decade from now.
Related articles
First-Time Homebuyer Checklist
Understanding Mortgage Rates
Reader comments (3)
This finally cleared up something my previous advisor kept hand-waving. Bookmarking.
Would love a follow-up piece on how this changes for self-employed households.
Really appreciate that you cited primary sources — most sites don’t.