How Much House Can You Afford?
Determining how much house you can afford is one of the most important steps in the homebuying process. This calculator uses your income, existing debts, down payment, and current interest rates to estimate the maximum home price that fits your budget.
Annual Income — your total gross income before taxes. If you are buying with a partner or co-borrower, include their income as well. Lenders use gross income, not take-home pay, to calculate affordability.
Monthly Debts — the total of all recurring monthly debt payments including car loans, student loans, credit card minimums, and any other obligations. Mortgage lenders use this to calculate your debt-to-income (DTI) ratio.
Down Payment — the cash you plan to put toward the home purchase. A larger down payment increases the home price you can afford and may eliminate the need for PMI.
Interest Rate — the mortgage interest rate you expect to receive. Your actual rate depends on your credit score, loan type, and market conditions. Even a 0.5% difference significantly changes affordability.
The calculator applies the 28/36 rule used by most lenders: your housing costs should not exceed 28% of gross income, and total debt payments should stay below 36%.
The 28/36 Rule Explained
The 28/36 rule is the standard guideline lenders use to determine how much mortgage you can qualify for:
- 28% Front-End Ratio — your total monthly housing costs (mortgage payment, property taxes, insurance, and HOA) should not exceed 28% of your gross monthly income.
- 36% Back-End Ratio — your total monthly debt payments (housing costs plus car loans, student loans, credit cards, etc.) should not exceed 36% of your gross monthly income.
For example, if your household earns $85,000 per year ($7,083 per month), your maximum housing payment under the 28% rule would be $1,983, and your total debt payments should stay below $2,550.
Some loan programs, particularly FHA loans, allow higher DTI ratios up to 43% or even 50% with compensating factors. However, just because you qualify for a certain amount does not mean you should borrow that much. Leave room in your budget for savings, maintenance, and unexpected expenses.
Factors That Affect How Much Home You Can Afford
Several factors beyond your income and debts determine your true affordability:
| Factor | Impact on Affordability | What You Can Do |
|---|---|---|
| Credit Score | Higher score = lower rate = more buying power | Pay bills on time, reduce credit utilization |
| Down Payment | More cash down = higher purchase price | Save aggressively, explore gift funds |
| Interest Rate | Each 0.5% lower adds ~$30K in buying power | Shop multiple lenders, buy down points |
| Property Taxes | High-tax areas reduce affordable price | Consider locations with lower tax rates |
| Existing Debt | More debt = lower maximum loan | Pay off car loans or credit cards first |
Your credit score has an outsized impact. A borrower with a 760 score may receive a rate 0.5-1.0% lower than someone with a 680 score, which translates to $50,000-$100,000 in additional buying power on the same monthly payment.
How Much House Can You Afford by Salary
One of the most common questions buyers ask is how much house they can afford on a specific salary. The table below shows estimated affordable home prices across income levels, using the 28/36 rule with a 10% down payment, a 6.5% interest rate, $400/month in existing debts, and typical property taxes and insurance. Your actual number will vary — use the calculator above for your exact situation.
| Annual Salary | Max Monthly Payment (28%) | Estimated Home Price |
|---|---|---|
| $40,000 | $933 | $140,000 – $160,000 |
| $50,000 | $1,167 | $180,000 – $205,000 |
| $60,000 | $1,400 | $220,000 – $250,000 |
| $75,000 | $1,750 | $280,000 – $320,000 |
| $100,000 | $2,333 | $380,000 – $430,000 |
| $125,000 | $2,917 | $480,000 – $540,000 |
| $150,000 | $3,500 | $580,000 – $650,000 |
| $200,000 | $4,667 | $780,000 – $870,000 |
These ranges assume relatively low existing debt. If you carry a car payment, student loans, or credit card balances, your affordable price drops because lenders cap your total debt at 36% of gross income. Conversely, a larger down payment or a lower interest rate pushes these numbers higher. The single biggest lever most buyers control is their down payment — every extra $10,000 down adds roughly $10,000 to the home price you can afford, plus it may help you avoid PMI.