How much house can I afford based on my salary?

A common rule is 2.5–3 times your annual household income. On a $100,000 salary, that's $250,000–$300,000. However, your actual budget depends on your down payment, interest rate, property taxes, insurance, and existing debts.

What is the 28/36 rule for home buying?

The 28/36 rule says your housing costs should not exceed 28% of gross monthly income and total debt payments should not exceed 36%. For a $6,000 monthly income, that's a $1,680 max housing payment and $2,160 total debt ceiling.

How does my credit score affect what I can afford?

A higher credit score gets you a lower mortgage rate. A 760+ score might qualify for 6% APR while a 650 score might get 7.5%. On a $300,000 loan, that 1.5% difference costs about $300/month and $108,000 over 30 years.

Should I include property taxes and insurance in my budget?

Yes. Property taxes and homeowners insurance can add 20–35% to your monthly payment. A $2,000 monthly mortgage can easily become $2,500–$2,700 with taxes, insurance, and PMI included. Always use PITI (Principal, Interest, Taxes, Insurance) for your budget.

How much do I need for a down payment?

Conventional loans require as little as 3% down, FHA loans need 3.5%, and VA/USDA loans may require 0%. However, putting 20% down eliminates PMI (private mortgage insurance), which typically costs 0.5–1% of the loan amount annually.

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Home Affordability Calculator

How much house can you actually afford? Based on real mortgage underwriting rules, not wishful thinking.

Currency

$ Gross Annual Income

Down Payment (%)

Interest Rate (%)

Loan Term (years)

Calculated locally. Share links keep values after #.

Max Home Price You Can Afford — — monthly payment

Loan Amount —

Down Payment —

Max Price —

Down Portion —

Loan Portion —

These calculators provide estimates for educational purposes only. Results are not guaranteed and should not be treated as financial advice. Always consult a qualified professional before making major financial decisions.

Calculation checked · August 8, 2026 Formula, assumptions, and limitations documented. Read methodology →

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At $85,000 income with $60,000 down and 6.5% rate, you qualify for roughly a $300,000 house. But add a $500 car payment and that drops to $265K. DTI is the number that actually decides what you qualify for. The 28/36 rule is not a suggestion -- it is what lenders actually use. Knowing your number before you tour houses saves weeks of disappointment.

How to use this calculator

Enter your annual household income before taxes (salary, bonus, commissions, side income).
Enter your monthly debt payments: car loans, student loans, credit card minimums, personal loans.
Enter your down payment amount, target interest rate, and estimated property taxes/insurance.
See your maximum affordable home price, monthly PITI payment, and how DTI limits your buying power.

How to calculate this by hand

Max Home Payment = Gross Monthly Income × 0.28 (front-end) or × 0.36 minus other debts (back-end)

The 28/36 rule: lenders cap housing costs at 28% of gross income and total debt at 36%. The lower of the two limits what you qualify for. Back-calculate from the max payment using the amortization formula to get your max loan amount, then add your down payment for max purchase price.

What $100,000 income buys in 2026

Income: $100,000/year ($8,333/month gross)
Debts: $400 car payment, $200 student loans, $100 credit card minimums
Down payment: $60,000 (20%) at 6.5% APR
Max home price: ~$340,000 with PITI of $2,100/month
Without the car payment: ~$375,000 with PITI of $2,350/month
The car payment alone costs you $35,000 in buying power

Result: Every $100/month in debt payments reduces your maximum home price by roughly $15,000-18,000 at current rates.

Tips

Get pre-approved before you start looking: Pre-approval tells you exactly what a lender will approve, based on your actual credit score, income, and DTI. It also signals to sellers that you are serious. Without it, you might fall in love with a house you cannot buy.
Budget for the full PITI, not just principal and interest: Property taxes, insurance, and PMI can add 25-40% to your monthly payment. A $1,800 principal/interest payment becomes $2,400 with taxes, insurance, and PMI. Always calculate PITI when determining what you can afford.
Lower your DTI before applying: Pay off small credit cards, avoid new car loans, and wait 6 months after major purchases. Every $100 in reduced monthly debt increases your buying power by $15,000-18,000. A few months of discipline can mean a significantly better home.
Do not max out your pre-approval amount: Lenders approve you for the maximum they think you can repay, not the amount that leaves you financial breathing room. Aim for a payment that is 25% or less of your take-home pay, not 36% of gross income.

Common mistakes to avoid

Only considering the mortgage payment, not maintenance - Home maintenance costs 1-2% of the home value annually. A $350,000 house costs $3,500-7,000/year in repairs, maintenance, and replacements. Budget for this before buying.
Ignoring how rate changes affect affordability - A 1% rate increase on a $300,000 loan adds $170/month and $61,000 over 30 years. If rates rise from 6% to 7%, your buying power drops by roughly 10%. Lock your rate when you find a good one.
Using your full pre-approval as your budget - Lenders approve you for the maximum they think you can handle, not what leaves you comfortable. If your pre-approval is $400,000, shop in the $300,000-350,000 range to leave room for savings, travel, and unexpected expenses.

FAQ

How much house can I afford on a $70,000 salary?

Roughly $200,000-250,000 depending on your down payment, debts, and rate. At 6.5% with $15,000 down and no other debts, your max is about $220,000 with a PITI of $1,550/month.

Should I buy the maximum house I qualify for?

No. Buying below your max leaves room for rate increases, job changes, and life events. The hedonic treadmill means a bigger house does not make you happier after the first 6 months. Buy what you need, not what the bank says you can afford.

How does student loan debt affect home affordability?

Student loans count toward your DTI even if payments are paused or in deferment. Lenders typically use 0.5-1% of the balance as the monthly payment for DTI calculation. A $40,000 student loan balance adds $200-400/month to your DTI, reducing buying power by $30,000-60,000.

Related resources

What You Can Afford with a Home Affordability Calculator - Use a home affordability calculator to find your real price range.
Mortgage Prepayment Calculator Guide - See how extra payments save thousands in mortgage interest.

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