🏠 Mortgage Calculator: How Much House Can I Afford in 2026?

The 28/36 Rule

Banks use the 28/36 rule to determine how much you can borrow:

28%: Your monthly housing costs (mortgage + taxes + insurance) should not exceed 28% of your gross monthly income. 36%: Your total monthly debt payments (housing + car + student loans + credit cards) should not exceed 36%.

Example: If you earn $6,000/month gross: • Max housing cost: $6,000 × 0.28 = $1,680/month • Max total debt: $6,000 × 0.36 = $2,160/month

What's Included in Your Monthly Payment

Your mortgage payment is more than just principal and interest:

• Principal: pays down the loan balance • Interest: the cost of borrowing (biggest chunk in early years) • Property tax: ~1-2% of home value per year, divided by 12 • Homeowners insurance: ~$100-300/month • PMI: required if down payment < 20% (~0.5-1% of loan/year) • HOA fees: if applicable ($0-500+/month)

Many people forget taxes, insurance, and PMI — then are shocked by the real payment.

15-Year vs 30-Year Mortgage

30-year: Lower monthly payment, more total interest paid. Best if cash flow is tight. 15-year: Higher monthly payment (~40% more), but you save $100,000+ in interest and own your home in half the time.

Example on a $300,000 loan at 6.5%: • 30-year: $1,896/month, $382,633 total interest • 15-year: $2,613/month, $170,388 total interest • Savings: $212,245 in interest

How Down Payment Affects Your Mortgage

20% down is standard — it eliminates PMI (saves $100-300/month). 10% down: smaller upfront cost but PMI adds ~$150/month until you reach 20% equity. 3-5% down (FHA/conventional): lowest barrier to entry but highest monthly cost.

Every 1% more down payment reduces your monthly payment by roughly $50-70 on a $350K home.