How Much House Can You Afford? A Simple Guide
Use the 28/36 rule, down payment, interest rate, and term to work out a realistic home budget — with calculators to run your own numbers.
Published June 7, 2026
The honest answer to “how much house can I afford?” isn’t the maximum a bank will lend you — it’s the payment you can comfortably carry while still saving and living. This guide gives you a simple framework and the numbers to run.
Start with the 28/36 rule
Lenders and financial planners lean on two ratios:
- 28% front-end: your monthly housing cost (principal, interest, taxes, insurance) should stay under 28% of gross monthly income.
- 36% back-end: all your debt payments combined (housing + car + loans + cards) should stay under 36% of gross income.
So if you earn ₱100,000/month gross, aim to keep housing under ~₱28,000 and total debt under ~₱36,000.
Work backwards from the payment
Once you know your comfortable monthly payment, the Mortgage Calculator lets you reverse-engineer the loan: adjust the price, down payment, rate, and term until the monthly figure fits your budget. The Loan Payment Calculator does the same for the principal-and-interest portion.
Three levers change what you can afford:
- Down payment — a bigger one shrinks the loan and the payment (and can drop mortgage insurance).
- Interest rate — even one percentage point meaningfully changes the monthly cost over 20–30 years.
- Term — a longer term lowers the monthly payment but raises total interest paid. The mortgage calculator’s balance chart shows that trade-off clearly.
Don’t forget the costs beyond the loan
The mortgage payment is only part of it. Budget for property tax, insurance, association/HOA dues, maintenance (a common rule is ~1% of the home’s value per year), and closing costs. These are why the “28%” includes taxes and insurance, not just principal and interest.
Build the down payment first
If you’re not there yet, set a target and a date. The Savings Goal Calculator tells you how much to set aside monthly, and the Compound Interest Calculator shows how that grows if you invest it along the way.
FAQ
Should I borrow the maximum the bank approves? Usually no — approval is based on ratios, not your real lifestyle. Leave room for savings, emergencies, and rate increases.
Is a 15-year or 30-year loan better? A shorter term saves a lot of interest but raises the monthly payment. Use the calculator to see both and pick what’s sustainable.
How big a down payment should I aim for? 20% is the classic target because it often avoids mortgage insurance, but a larger one always lowers your payment and total interest.
These are estimates for planning, not financial advice.