How Much House Can I Afford?

Estimate the most you could pay for a home using the 28/36 rule of thumb that lenders start from, with property tax, insurance, PMI and your other debts included.

Household income before taxes.

Car loans, student loans, minimum card payments, child support. Not rent, utilities or groceries.

Home price you can afford
$320,000
Limited by the 28% housing rule
Monthly housing payment
$2,329.79Principal, interest, tax, insurance, PMI and HOA
Loan amount
$280,00012.5% down
Housing cost ÷ income
27.96%
All debts ÷ income
33.96%
  • The 28% housing rule is the limit for you. Your other debts are low enough that the 36% rule would allow up to $342,238.
  • This is a rule of thumb, not a loan approval. Lenders look at your credit, savings and full debt picture, and many approve higher ratios. Leave room in your budget for closing costs, maintenance and an emergency fund.
  • Your down payment is under 20% of this price, so PMI is included in the payment.

Both rules side by side

RuleMax monthly housingMax home pricePrincipal & interest
28% of income for housing$2,333.33$320,463$1,772.72
36% of income for all debts$2,500.00$342,238$1,910.35

The 28/36 rule

The 28/36 rule is a long-standing guideline for mortgage affordability. The first number, the front-end ratio, says your total housing payment (principal, interest, property tax, homeowners insurance, plus PMI and HOA dues if you have them) shouldn't exceed 28% of your gross monthly income. The second, the back-end ratio, says housing plus all your other monthly debt payments shouldn't exceed 36%.

Whichever rule gives the lower price is the one that binds. With few other debts, the 28% rule usually sets the limit. With a car payment and student loans, the 36% rule often kicks in first, which is why paying off a car loan can raise your budget more than a raise in pay would.

What lenders actually look at

Lenders measure your debt-to-income ratio (DTI) the same way: monthly debt payments, including the new mortgage, divided by gross monthly income. Different loan products and lenders set different DTI limits, and many allow more than 36% depending on the program, your credit and your savings. Being approved for a larger loan doesn't mean the payment will fit comfortably with everything else you spend on, so treat 28/36 as a sensible ceiling, not a target.

What moves the answer

Interest rates have a big effect: at the default inputs, the affordable price is $346,000 at 5.5%, $320,000 at 6.5% and $297,000 at 7.5%. Property taxes and insurance matter too, because they come out of the same 28%. A bigger down payment raises the price directly and, once it reaches 20%, removes PMI. Paying off a monthly debt raises the back-end limit dollar for dollar.

The result doesn't include closing costs, moving costs, furniture or repairs. Make sure you'll still have savings after the down payment.

How the price is found

Front-end limit = 0.28 × gross monthly incomeBack-end limit = 0.36 × gross monthly income − other monthly debtsHousing cost(price) = P&I on (price − down) + price × tax rate ÷ 12 + insurance ÷ 12 + PMI + HOAAffordable price = the highest price whose housing cost fits the lower of the two limits
  • P&I = loan × r ÷ (1 − (1 + r)^−n), with r = rate ÷ 12 and n = months
  • PMI applies only when the down payment is under 20% of the price

Example: $100,000 income, $500 of other debts

  1. Gross monthly income: $100,000 ÷ 12 = $8,333.33.
  2. 28% rule: housing up to $2,333.33 a month. 36% rule: $3,000.00 − $500 of debts = $2,500.00 for housing.
  3. The 28% limit is lower, so it binds. With $40,000 down, 6.5% for 30 years, 1.1% property tax, $1,800 insurance and 0.5% PMI, the highest price that fits $2,333.33 is just over $320,000 (shown rounded down to $320,000).
  4. Under the 36% rule alone you could go to about $342,000, so paying off the $500 of debts wouldn't raise your budget here.

Frequently asked questions

How much house can I afford on a $100,000 salary?

Using the 28/36 rule with $500 of other monthly debts, $40,000 down, a 6.5% rate and 1.1% property tax, $1,800 insurance and 0.5% PMI, about $320,000. Your answer moves a lot with the rate, taxes and down payment, so enter your own numbers.

Does the 28/36 rule use gross or take-home pay?

Gross income, before taxes and deductions, which is how lenders calculate debt-to-income ratios. Because take-home pay is lower, the payment will feel like a bigger share of what you actually receive.

What counts as monthly debt?

Minimum payments on credit cards, car loans, student loans, personal loans, and court-ordered payments like child support. Rent (which the mortgage replaces), utilities, insurance and groceries aren't counted.

Can I get approved for more than this?

Often, yes. Many loan programs allow higher debt-to-income ratios for borrowers with strong credit or savings. That makes a larger loan possible, not necessarily wise; check the payment against your actual budget.

Should I include PMI?

If you're putting down less than 20% on a conventional loan, yes: PMI is part of the monthly housing cost lenders count. The calculator adds it automatically when the down payment is under 20% of the price.

Sources

Last reviewed for 2026. How we calculate.