How much house
can you afford?
Lenders cap housing at 28% of income and total debt at 36%. Here is how to find your real number — before a lender tells you what you can “stretch” to.
Affordability is a ratio, not a feeling
Lenders use two caps: your housing payment (principal, interest, taxes, insurance — PITI) should be ≤ 28% of gross income, and all debts combined ≤ 36%. Many lenders stretch to 43%+, but the extra room is risk, not generosity.
The affordability calculation also depends on interest rate and down payment. At 6.5%, a $100,000 difference in price is roughly $630/month. Run the calculator below with your real numbers.
28/36 ratios
Housing ≤28% and total debt ≤36% of gross income. Beyond 43% is lender discretion and risk.
Rate & term
A 30-year fixed at 6.5% means ~$6.33/month per $1,000 borrowed.
Down payment
3–20%. A bigger down payment lowers the loan, the payment and PMI.
The quiet rule : Just because a lender approves you for $500k does not mean you can afford it. The “house-poor” line is when housing exceeds 30% of take-home — which is lower than the 28% gross ratio. Be conservative.
How to find your real number
Five steps from income to offer.
-
1
Total your gross income
Salary + bonus + self-employment + investment income, averaged. Lenders use your full gross, not net.
-
2
Apply the 28% ratio
Housing (PITI) should stay under 28% of gross. That includes taxes and insurance, not just the loan.
-
3
Add your debts
Car loans, student loans, credit cards and alimony count. Total debt should stay under 36% (back-end).
-
4
Fix the rate and down payment
Your rate sets the monthly per $1,000. Your down payment sets how much you borrow — and whether you pay PMI.
-
5
Stress-test with savings
If a payment leaves under ~20% of take-home after debts, you will be house-poor. Leave a buffer.
Price vs monthly payment
30-year fixed at 6.5%, 20% down, PITI estimated.
| Home price | Down payment | Monthly PITI | Income needed (28%) |
|---|---|---|---|
| $200,000 | $40,000 | $1,320 | $57,000 |
| $300,000 | $60,000 | $1,980 | $85,000 |
| $400,000 | $80,000 | $2,640 | $113,000 |
| $500,000 | $100,000 | $3,300 | $141,000 |
What moves your number
Three levers change affordability the most.
Income
- Higher income raises both caps
- Stable income beats a big bonus
- Debt-free income counts fully
Interest rate
- Every 1% changes payment ~7–9%
- Rate shopping saves $100k+ in interest
- Points buy down the rate
Down payment
- Bigger down = smaller loan
- 20% removes PMI
- More equity = better rate
Debt
- Debt consumes the 36% budget
- Pay off cards before you apply
- Co-signers change the math
How much can you afford?
Slide your income, rate and down payment — see your max home price and monthly payment instantly.
Estimates only, based on your inputs.
What fits your situation
Match the target to your real profile.
First-time buyer
Target the 28% housing ratio. Include PMI if you put down less than 20%.
Two incomes
Both incomes count, but so do both debts. Use the combined 36% cap.
High earner, big debts
Student loans or car payments eat the back-end ratio fast. Pay down debt first.
Self-employed
Lenders average 2 years of tax returns. A lower stated income means a lower max price — plan for it.
Gifted down payment
Gift funds are allowed with documentation. A larger down payment raises your max price and kills PMI.
High-cost market
In expensive areas the 28% rule alone may not stretch far enough. That is the signal to rent or wait, not to stretch.
Ways to raise your max price & Affordability traps
Ways to raise your max price
- ✔Pay down consumer debt before applying.
- ✔Shop rates and buy points if you will stay long-term.
- ✔Increase the down payment or use gift funds.
- ✔Add a co-borrower with stable income.
Affordability traps
- ✕Treating lender pre-approval as a spending target.
- ✕Ignoring taxes and insurance in the payment.
- ✕Buying at the 43% stretch with no emergency fund.
Mortgage terms decoded
The lending lexicon, in plain English.
Mortgage affordability FAQ
How much house can I afford?
What is the 28/36 rule?
How much of my income should go to a mortgage?
Does my credit score affect affordability?
Can I afford a house if I have student loans?
How much down payment do I need?
Should I use my full pre-approval amount?
How do interest rates change what I can afford?
2026 US averages. Actual approval depends on credit, debts and lender policy. This guide is educational, not a lender quote.
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Run your real affordability
Use the calculator above, then price out the closing costs and full monthly payment.