How Much House Can You Afford?
Before you start house hunting, know your real budget. This calculator uses the 28/36 rule (housing ≤28% of income, total debt ≤36%) to estimate the maximum home price you can afford - based on income, debts, down payment, and current rates.
The 28/36 Rule
- 28%: Housing costs (mortgage, tax, insurance, PMI) ≤ 28% of gross monthly income
- 36%: Total debt (housing + car + student loans + credit cards) ≤ 36% of gross monthly income
Some lenders allow up to 43% DTI (debt-to-income) for qualified borrowers, but 36% is safer.
Worked Example: $90,000 Salary, $500 Monthly Debt
- Gross monthly income: $7,500
- Max housing (28%): $2,100/month
- Max total debt (36%): $2,700/month
- Existing debt: $500
- Mortgage budget: $2,200/month (includes PITI)
- Down payment: $60,000
- Rate: 6.5%, 30 years
- Max home price: $415,000
Home Price by Income (2026, 20% Down, 6.5%)
| Income | Max Housing/mo | Est. Home Price |
|---|---|---|
| $50,000 | $1,167 | $190,000 |
| $75,000 | $1,750 | $285,000 |
| $100,000 | $2,333 | $380,000 |
| $150,000 | $3,500 | $570,000 |
| $200,000 | $4,667 | $760,000 |
What Lenders Look At
- Credit score (740+ gets best rates)
- Debt-to-income ratio (under 36% ideal, 43% max)
- Employment history (2+ years preferred)
- Down payment size (20% avoids PMI)
- Cash reserves (2-6 months of payments)
- Loan-to-value ratio (under 80% avoids PMI)
How to Afford More House
- Pay down existing debt (raises max DTI capacity)
- Save a larger down payment (20% avoids PMI)
- Improve credit score (740+ for best rates)
- Increase income or add a co-borrower
- Consider a less expensive area
- Shop multiple lenders for the best rate
Frequently Asked Questions
How much house can I afford on my salary?
A common rule: 3-4x your annual salary if you have 20% down and no other debts. See the table above for specifics.
What is the 28/36 rule?
Housing costs ≤28% of gross income, total debt ≤36%. Lenders use DTI to evaluate mortgage applications.
What credit score do I need?
620+ for conventional, 580 for FHA. 740+ gets the best rates.
Should I use 43% DTI?
Only if you have strong reserves and stable income. 43% is the maximum for qualified mortgages.
Does student loan debt affect my mortgage?
Yes - monthly student loan payments count in your DTI ratio and reduce how much you can borrow.
How much down payment do I need?
20% avoids PMI and lowers your payment. 5-10% is common for first-time buyers but adds PMI.