How Much House Can I Afford?
Two numbers matter: the most a lender will approve, and the most you should actually spend. The calculator shows both, along with the monthly payment behind each. It starts on a $100,000 salary — change the five inputs to match your situation.
Maximum Home Price
$353,000
$2,330/mo · limited by the 28% housing rule
Recommended Home Price
$319,000
$2,081/mo · leaves a savings cushion
Your Numbers
Before taxes, all borrowers combined
Car, student loans, card minimums — not utilities or groceries
17.0% of your maximum price
Assumes property tax of 1.2% of home price per year and $1,500/year for homeowners insurance. PMI is not included — with less than 20% down, expect it to trim your budget.
Monthly Payment at $353,000
Loan Amount
$293,000
Down Payment
17.0%
Front-End DTI
28.0%
Back-End DTI
32.8%
Gross monthly income: $8,333 | 28% housing cap: $2,333 | 36% cap less debts: $2,600
The 28/36 Rule Explained
Almost every conventional mortgage is underwritten against the 28/36 rule. It is two separate ceilings, and your budget is whichever one binds first.
| Ratio | What it counts | Ceiling |
|---|---|---|
| Front-end | Housing only — principal, interest, taxes, insurance | 28% of gross monthly income |
| Back-end | Housing plus car loans, student loans, card minimums | 36% of gross monthly income |
On a $100,000 salary — $8,333 a month gross — the front-end ceiling is $2,333 and the back-end ceiling is $3,000 before other debts are subtracted. With $400 a month of other debt, the back-end rule still leaves $2,600 for housing, so the 28% rule binds and your housing budget is $2,333.
Add debt and that flips. Take the same $100,000 salary with a $500 car payment and a $400 student loan: the back-end rule now leaves only $2,100 for housing, and it — not the 28% rule — sets your price. This is why paying off a car loan before you shop can raise your budget more than a raise would. Work your own ratio on the debt-to-income ratio calculator.
The recommended price above applies the same math with a cushion — 25% of gross income for housing, 33% for total debt. That is our budgeting guideline rather than a lender rule, and it exists because the 28/36 ceiling assumes your property taxes never rise and your roof never leaks.
How Lenders Calculate Affordability
A lender is not asking what you can afford. It is asking what it can safely lend, and it works through four steps in order:
- Gross income, not take-home. Every ratio uses income before taxes and deductions. Bonus and commission income usually needs a two-year history before it counts at all.
- Debts from your credit report.Only recurring obligations count — car payments, student loans, minimum card payments, child support. Utilities, groceries, insurance premiums, and daycare do not appear, which is why a lender's ceiling can feel higher than your real budget.
- The full PITI payment. Affordability is measured against principal, interest, taxes, and insurance together — plus PMI and any HOA dues. A $2,333 ceiling is not $2,333 of principal and interest.
- The lower of the two ratios. Both the 28% and 36% tests must pass, so the binding one sets your number.
Two things the ratios ignore deserve your attention anyway. The first is cash to close: you need the down payment plus closing costs, which typically run 2–5% of the purchase price and are due the same day. Estimate yours with the closing costs calculator before you commit every dollar to the down payment.
The second is PMI. Put less than 20% down on a conventional loan and private mortgage insurance is added to the payment, consuming part of the same 28% ceiling and shrinking the price you qualify for. It can be cancelled at 80% loan-to-value and terminates automatically at 78% — the PMI calculator estimates the premium and the cancellation date.
How Down Payment Size Affects What You Can Afford
A bigger down payment raises your maximum price — but by less than the money you put in. Your monthly ceiling is fixed by your income, and part of every payment goes to property tax, which scales with the price of the house rather than the size of the loan. Here is a $100,000 earner with $400 of monthly debt at 6.5% over 30 years:
| Down payment | Max home price | Loan amount | % down |
|---|---|---|---|
| $20,000 | $318,000 | $298,000 | 6.3% |
| $40,000 | $336,000 | $296,000 | 11.9% |
| $60,000 | $353,000 | $293,000 | 17.0% |
| $80,000 | $370,000 | $290,000 | 21.6% |
| $100,000 | $387,000 | $287,000 | 25.8% |
Going from $20,000 down to $100,000 down — an extra $80,000 of cash — buys only $69,000 more house. Each additional $20,000 adds about $17,000 of price, because the larger house carries a larger tax bill that eats into the same fixed monthly ceiling. The loan amount barely moves at all: it is pinned near $290,000 by your income no matter how much you put down.
So the down payment is worth saving for, but not for the reason most buyers think. It does not unlock a dramatically bigger house — it clears the 20% threshold that eliminates PMI, and it shrinks the interest you pay over the life of the loan. Map a target and a timeline with the down payment savings goal calculator.
Affordability by Income Level
The same 28/36 math at four common salaries. All rows assume 20% down (so no PMI), $400 a month of other debt, a 6.5% rate over 30 years, property tax at 1.2%, and $1,500 a year for insurance.
| Salary | Housing ceiling | Max price | Recommended price | Payment at max |
|---|---|---|---|---|
| $50,000 | $1,100 | $160,000 | $140,000 | $1,094 |
| $75,000 | $1,750 | $268,000 | $237,000 | $1,748 |
| $100,000 | $2,333 | $364,000 | $323,000 | $2,330 |
| $150,000 | $3,500 | $557,000 | $495,000 | $3,498 |
The $50,000 row is the one worth studying. It is the only salary here where the 36% back-end rule binds instead of the 28% rule: 28% of $4,167 would allow $1,167 of housing, but 36% less the $400 debt payment allows only $1,100. At lower incomes a fixed debt payment consumes a much larger share of the ratio, so clearing a car loan moves the needle far more than it does at $150,000.
Notice too that affordability does not scale with salary. Tripling income from $50,000 to $150,000 multiplies the affordable price by roughly 3.5×, because the $1,500 insurance bill and the $400 debt payment are fixed costs that a larger income absorbs more easily.
We have worked the full scenario — PMI, down payment timeline, and payment tables — for individual salaries:
- How much house can I afford on $60K
- How much house can I afford on $80K
- How much house can I afford on $100K
- Full affordability calculator — adjust property tax and insurance rates for your area
Recommended reading
Books for first-time homebuyers
New to buying a home? These well-reviewed guides pair nicely with the calculator above — they walk you through budgeting, financing, and the paperwork so you head into your first purchase prepared.
Home Buying Kit For Dummies
Eric Tyson & Ray Brown
A plain-English walkthrough of the entire purchase — from sizing up what you can afford to making an offer and closing.
First-Time Home Buyer: The Complete Playbook
Scott Trench & Mindy Jensen
A step-by-step playbook for first-timers covering financing, negotiation, and avoiding the costly rookie mistakes.
Nolo's Essential Guide to Buying Your First Home
Ilona Bray, Alayna Schroeder & Marcia Stewart
A practical legal-and-financial guide to the paperwork, contracts, and contingencies behind your first purchase.
As an Amazon Associate this site earns from qualifying purchases. Links are sponsored.
Frequently Asked Questions
How much house can I afford on my income?
Multiply your gross monthly income by 0.28 to get the most lenders will let you spend on housing each month, then subtract your other debt payments from 36% of that same income and take whichever number is smaller. That monthly ceiling, combined with your down payment and interest rate, sets your maximum price. On a $100,000 salary with $400 of monthly debt and $60,000 down at 6.5%, that works out to about a $353,000 home.
What is the difference between the maximum and recommended price?
The maximum is the qualifying ceiling — the most a lender following the 28/36 rule will approve. The recommended price applies a cushion, holding housing to 25% of gross income and total debt to 33%, so the payment still fits when the property tax bill rises or the water heater fails. It is a budgeting guideline, not a lender rule.
Does the calculator include PMI?
No. It includes principal, interest, property tax, and homeowners insurance. If you put down less than 20%, private mortgage insurance is added on top and comes straight out of your housing budget, which lowers the price you can afford. Estimate the premium with the PMI calculator.
Do lenders ever approve a higher debt-to-income ratio than 36%?
Yes. Qualified borrowers are routinely approved with back-end ratios of 43%, and some conventional and FHA loans go to 50% when there are compensating factors like large cash reserves or a high credit score. Being approved for that much and being able to live on what is left over are different questions.
Does my down payment need to be 20%?
No. Conventional loans go as low as 3% down and FHA loans as low as 3.5%. Twenty percent is simply the threshold at which private mortgage insurance is no longer required. Below it you can still buy — you just carry PMI until you reach 20% equity, at which point it can be cancelled.