How Much House Can I Afford?
By the Calculator.hair team · Updated · 7 min read
Short answer
Most lenders cap your housing payment at 28% of gross monthly income and all debt payments at 36%. With no other debts, a 20% down payment, a 6.5% 30-year rate, 1.5% property tax and 0.5% insurance, that works out to a home price of about 3.5 times your salary: roughly $347,000 on $100,000 a year, or $174,000 on $50,000.
Key takeaways
- The 28/36 rule limits housing costs to 28% of gross income and total debt payments to 36%.
- At a 6.5% rate with 20% down and no debts, the affordable price is about 3.5 times annual income.
- On a $100,000 salary, debts up to $666.67 a month cost nothing; beyond that, each extra $100 of monthly debt lowers the affordable price by about $14,900.
- A rate one point higher cuts buying power by about 7%; a point lower raises it by about 8%.
- Lender limits are a ceiling, not a budget: closing costs, repairs and savings goals still need room.
How do lenders decide how much house you can afford?
Lenders decide by comparing your monthly payments to your gross monthly income, which is your pay before taxes and deductions. The comparison is called the debt-to-income ratio, or DTI. It comes in two forms.
The front-end ratio is your total housing payment divided by gross monthly income. Housing payment here means principal and interest on the loan plus property tax, homeowners insurance, any mortgage insurance and HOA dues, often shortened to PITI. The back-end ratio adds every other recurring debt payment to that: car loans, student loans, minimum credit card payments, child support.
Whichever ratio runs out first sets your limit. The house affordability calculator works backward from that limit to the highest price whose full monthly cost still fits, and our debt ratio calculator shows where you stand today.
What is the 28/36 rule?
The 28/36 rule says your housing payment should be no more than 28% of gross monthly income and your total debt payments no more than 36%. It is the classic guideline for conventional loans and the default setting in our calculator.
On a $100,000 salary, gross monthly income is $8,333.33. Twenty-eight percent of that is $2,333.33 for housing, and 36% is $3,000 for housing plus all other debts. If you have no other debts, the 28% front-end limit is the one that binds. If your other debts exceed $666.67 a month (8% of income), the back-end limit takes over and shrinks what is left for housing.
The rule is a starting point, not a legal cap. Fannie Mae's Selling Guide sets a 36% maximum DTI for manually underwritten loans, allows up to 45% when the borrower meets credit score and reserve requirements, and accepts up to 50% for loans approved through its Desktop Underwriter system. FHA loans are often described with 31% and 43% limits, and VA loans use a 41% back-end benchmark. Being approved at a higher ratio means a larger loan, not necessarily a comfortable one.
How much house can I afford with my income?
The table below shows the affordable home price for salaries from $50,000 to $200,000, computed with our house affordability calculator. Assumptions: 28/36 rule, no other monthly debts, 20% down payment, 30-year fixed rate of 6.5%, property tax of 1.5% of the price per year, homeowners insurance of 0.5% per year, and no HOA dues.
Because every cost in this setup scales with the price, the result is a straight line: about $3.47 of house for every $1 of income. Your own figure moves with your rate, taxes, insurance and debts, so treat the table as a reference and run your numbers.
| Annual income | Home price | Loan amount | Down payment (20%) | Total monthly housing cost |
|---|---|---|---|---|
| $50,000 | $173,528 | $138,823 | $34,706 | $1,166.67 |
| $60,000 | $208,234 | $166,587 | $41,647 | $1,400.00 |
| $75,000 | $260,292 | $208,234 | $52,058 | $1,750.00 |
| $80,000 | $277,645 | $222,116 | $55,529 | $1,866.67 |
| $90,000 | $312,351 | $249,881 | $62,470 | $2,100.00 |
| $100,000 | $347,056 | $277,645 | $69,411 | $2,333.33 |
| $120,000 | $416,468 | $333,174 | $83,294 | $2,800.00 |
| $150,000 | $520,585 | $416,468 | $104,117 | $3,500.00 |
| $175,000 | $607,349 | $485,879 | $121,470 | $4,083.33 |
| $200,000 | $694,113 | $555,290 | $138,823 | $4,666.67 |
How much home can I afford on a $100k salary?
On a $100,000 salary with no other debts, you can afford a home of about $347,000 under the 28/36 rule, using the assumptions above. Here is how the calculator gets there.
- Gross monthly income: $100,000 ÷ 12 = $8,333.33.
- Housing budget at 28%: $8,333.33 × 0.28 = $2,333.33 a month.
- Property tax at 1.5% a year on $347,056: $433.82 a month.
- Insurance at 0.5% a year: $144.61 a month.
- That leaves $1,754.91 for principal and interest, which carries a $277,645 loan at 6.5% for 30 years.
- Add the 20% down payment of $69,411 and the price is $347,056.
How do debts change how much mortgage I can qualify for?
Debts reduce the mortgage you can qualify for once they push you past the back-end limit. On a $100,000 salary, the 36% back-end cap allows $3,000 a month for housing and debts combined, while the 28% front-end cap allows $2,333.33 for housing alone. So the first $666.67 of other monthly debt costs you nothing; beyond that, each dollar of debt is a dollar less for housing.
Keeping the same assumptions, here is what the calculator returns for three debt levels. A $1,000 car-and-student-loan payment drops the affordable price by about $50,000, or roughly the same as a 14% pay cut.
| Other monthly debts | Limit that binds | Housing budget | Home price | Loan amount |
|---|---|---|---|---|
| $0 | Front-end (28%) | $2,333.33 | $347,056 | $277,645 |
| $500 | Front-end (28%) | $2,333.33 | $347,056 | $277,645 |
| $1,000 | Back-end (36%) | $2,000.00 | $297,477 | $237,982 |
How much do interest rates change what you can afford?
Rates change affordability a lot because the same monthly budget supports a smaller loan when more of each payment goes to interest. On a $100,000 salary with the assumptions above, the calculator gives these prices:
- At 5.5%: $375,800 (loan of $300,640).
- At 6.5%: $347,056 (loan of $277,645).
- At 7.5%: $321,379 (loan of $257,103).
How does the down payment affect how much house you can buy?
A bigger down payment lets the same monthly budget buy a more expensive home, because less of the price is borrowed. It also changes your costs: on a conventional loan, putting down less than 20% usually adds private mortgage insurance (PMI) to the monthly payment, which the 28% budget then has to absorb.
Low-down-payment loans trade cash up front for a larger loan. With an FHA-style 31% front-end limit and 3.5% down on a $100,000 salary, the calculator shows a $332,641 price with a $320,999 loan, but that figure leaves out FHA mortgage insurance, so the real number is lower. Use the down payment calculator to see what different down payments mean for price and cash needed, and the mortgage calculator to check the full payment on a specific home, including PMI.
Remember the cash you need on closing day as well. Closing costs typically run 2% to 5% of the loan amount, on top of the down payment, and you will want an emergency fund left over after you move in.
How much house should I buy, not just qualify for?
Buy a house whose full monthly cost you could still pay after a job change, a new car payment or a rise in property taxes. Qualifying ratios are calculated from gross pay, but you live on take-home pay, so a 28% gross payment can be 35% to 40% of your net income.
A practical check is to add maintenance to your budget. A common planning figure is 1% to 2% of the home's value each year; on a $347,000 home that is $289 to $578 a month. If paying that plus your mortgage, retirement savings and other goals feels tight, aim for a lower price than the table shows.
If you are unsure whether buying makes sense yet, compare it with staying put in our rent vs. buy guide. To see how the payment itself is built, read how to calculate a mortgage payment, and to compare loan terms, see 15 vs. 30-year mortgage.
Calculators in this guide
Frequently asked questions
How much house can I afford making $75,000 a year?
About $260,000 under the 28/36 rule, assuming no other debts, 20% down, a 6.5% 30-year rate, 1.5% property tax and 0.5% insurance. That keeps the full housing payment at $1,750 a month.
Is 3 times my salary a good rule for a house price?
It is a reasonable conservative shortcut. At 6.5% with 20% down and typical taxes, the 28% limit works out to about 3.5 times income with no debts, and less if you carry car or student loan payments.
Does the 28% include property taxes and insurance?
Yes. The 28% front-end ratio covers principal, interest, property tax, homeowners insurance, mortgage insurance and HOA dues, not just the loan payment.
Do lenders use gross or net income?
Lenders use gross monthly income, before taxes and payroll deductions. That is why a payment that meets the 28% rule can feel larger against your actual paycheck.
Can I get approved above 36% DTI?
Often, yes. Fannie Mae allows up to 45% on manually underwritten loans with qualifying credit and reserves, and up to 50% through Desktop Underwriter, but a higher ratio leaves less room in your monthly budget.
This guide is for education and is not financial, tax or legal advice. Confirm figures with a qualified professional or your lender.