How Much House Can I Afford?

How This Affordability Calculator Works

This affordability calculator works backwards from your monthly budget to find the maximum home price you can comfortably carry. Instead of starting with a home price and hoping the payment fits, it starts with what you can actually afford to pay each month and solves for the loan amount and home price that payment supports.

You enter your annual household income, your down payment, and your recurring monthly debts — things like car payments, minimum credit card payments, student loans, and any other installment debt. The calculator applies the 28/36 rule, the guideline most lenders use to keep housing payments in a safe range, then factors in property taxes, homeowners insurance, and PMI (if your down payment is under 20%) to land on a maximum home price.

The result is a conservative, real-world number — not a best-case scenario. It assumes you want your housing payment to fit comfortably within your budget, not stretch it to the breaking point. If your debts are low and your down payment is solid, you may qualify for more. If your debts are higher, paying them down before you buy can meaningfully increase your buying power. You can also adjust the DTI sliders if your lender allows higher ratios — many VA and FHA loans go up to 43% or beyond.

Once you have a target price, plug it into our mortgage calculator to see the exact monthly breakdown — principal, interest, taxes, insurance, and PMI — for that home.

The 28/36 Rule Explained

The 28/36 rule is the foundation of how most lenders decide how much home you can afford. It sets two limits on your monthly budget, both measured against your gross monthly income — what you earn before taxes and deductions.

The 28% limit (housing): Your total monthly housing payment — principal, interest, property taxes, homeowners insurance, PMI, and HOA fees — should stay under 28% of your gross monthly income. This is the number that keeps your mortgage from crowding out the rest of your life.

The 36% limit (total debt): Your total monthly debts — housing payment plus car payments, minimum credit card payments, student loans, child support, and any other recurring debt — should stay under 36% of your gross monthly income. This is the number that keeps your overall debt load manageable.

Here's how the math works on a $75,000 salary. Your gross monthly income is $6,250. Under the 28% rule, your maximum housing payment is $1,750 per month. Under the 36% rule, your maximum total debt is $2,250 per month. If you already have $500 in monthly car and credit card payments, that leaves $1,750 for housing — which is exactly where the two rules meet. If your existing debts were $1,000 instead, your housing budget would drop to $1,250, because the 36% limit becomes the binding constraint.

The 28/36 rule isn't a law — some lenders and loan programs allow higher ratios — but it's the most reliable benchmark for keeping your housing payment affordable over the long haul.

What Is Debt-to-Income Ratio (DTI) and How Lenders Use It

Your debt-to-income ratio, or DTI, is the single number lenders use to measure how much of your income is already spoken for by debt. It's calculated by dividing your total monthly debt payments by your gross monthly income and expressing the result as a percentage.

Worked example: Say you earn $6,250 a month (a $75,000 salary). You have a $350 car payment, $150 in minimum credit card payments, and a $200 student loan payment. Your total monthly debts are $700. Your DTI is $700 ÷ $6,250 = 11.2%. Now add a proposed $1,750 mortgage payment. Your new total monthly debt is $2,450, and your new DTI is $2,450 ÷ $6,250 = 39.2%.

That 39.2% would exceed the 36% guideline — which means a lender would either ask for a larger down payment, a lower home price, or more income to bring the ratio back down. This is why paying off a credit card or two before applying can directly increase how much house you qualify for: every dollar of monthly debt you remove frees up borrowing power under the DTI limit.

Most conventional loans cap DTI at 43%, though many lenders prefer to see it under 36%. FHA loans often allow up to 43% (sometimes 50% with compensating factors), and VA loans use a similar residual-income approach but can be more flexible. The lower your DTI, the stronger your application — and the more home you can afford.

How Much House Can I Afford on My Salary?

The table below shows the maximum monthly housing payment under the 28% rule and an estimated maximum home price at four common salary levels. These are estimates to illustrate how income translates to buying power — your actual number depends on your debts, down payment, interest rate, taxes, and insurance.

Assumptions: 7% interest rate, 30-year fixed-rate loan, 10% down payment, ~1.1% property tax, and $1,500/year homeowners insurance. Max monthly payment follows the 28% rule. Estimates exclude PMI and HOA. Actual affordability varies by location, rate, debts, and down payment — use the calculator above for your real number.

Notice how the estimated home price doesn't scale linearly with income. Property taxes and insurance take a fixed bite out of each payment, so at lower salaries a larger share of your budget goes to those costs rather than to principal and interest. That's why two buyers with very different incomes can end up with surprisingly different price ranges — and why keeping your debts low matters so much.

How Down Payment, Interest Rate and Debts Change Your Budget

Three inputs move your maximum home price more than almost anything else: your down payment, your interest rate, and your existing debts. Understanding how each one works helps you see exactly where to focus if you want to afford more.

Down payment: A bigger down payment does two things at once. It lowers your loan amount — which lowers your monthly principal and interest payment for the same home price — and, if you reach 20%, it eliminates PMI entirely. Both effects free up monthly budget, which means the same income can support a higher home price. Going from 5% down to 20% down on a $300,000 home can cut your payment by hundreds per month.

Interest rate: Your rate has a massive impact because it compounds over 30 years. On a $300,000 loan, the difference between 6.5% and 7.5% is roughly $200 per month — and over the life of the loan, more than $70,000 in interest. A lower rate means a lower payment for the same loan, which means more home for the same monthly budget. This is why your credit score matters so much: it directly drives the rate you qualify for. Read our guide on how to improve your credit score before buying to see how to push your rate down before you apply.

Existing debts: Every dollar of monthly debt you carry reduces the room you have left for a mortgage under the 36% DTI limit. A $400 car payment can cut your maximum home price by tens of thousands of dollars. Paying down or paying off debts before you apply is one of the fastest ways to increase your buying power — often faster than saving a larger down payment.

How to Afford More House

If the calculator shows a lower number than you were hoping for, you have real levers to pull. None of them are quick fixes, but all of them are within your control.

Lower your DTI. Pay down credit cards, student loans, and car loans — especially anything with a large monthly payment relative to its balance. Every $100 of monthly debt you remove can add thousands to your maximum home price.

Raise your credit score. A higher score qualifies you for a lower interest rate, which lowers your monthly payment and raises the home price that payment supports. Even 20–40 points can make a meaningful difference. Pull your reports, dispute errors, and keep your credit utilization under 30%.

Increase your down payment. More cash down means a smaller loan, a lower payment, and — at 20% — no PMI. It also strengthens your offer in competitive markets.

Consider VA or FHA loans. Some loan programs allow higher DTI ratios or lower down payments, which can increase how much you qualify for on the same income. If you're a veteran or active-duty service member, VA loans offer $0 down and no PMI. First-time buyers may qualify for down payment assistance — see our first-time buyer programs guide.

The combination that moves the needle fastest is almost always the same: pay down debts, improve your credit, and save a bit more. Run the numbers again after each change to see exactly how much your buying power grew.

Frequently Asked Questions