"How much house can I afford?" — what the number really depends on
Most people ask this question backwards. They pick a home price, then hope they qualify. Lenders do it the other way: they start with your income and debts, and work out the maximum payment you can carry. This calculator uses the same logic they do, so the number you see here is close to what a lender will actually offer.
The core rule is the 28/36 guideline. Lenders generally want your total housing payment to stay under 28% of your gross monthly income (the "front-end" ratio), and all your debt payments combined — housing plus car loans, student loans, credit card minimums — under 36% (the "back-end" ratio). Whichever limit you hit first is the one that caps your budget.
Why your down payment changes everything
A bigger down payment does three things at once: it lowers the loan amount, it can eliminate PMI once you cross 20%, and it shrinks the monthly payment — which frees up room under that 28% ceiling to afford a higher-priced home. It's the single biggest lever you control. Playing with the down payment field above shows exactly how much difference each $10,000 makes.
The gap between "approved for" and "can afford"
Here's something a lender won't emphasize: the maximum they'll approve you for is often more than you should comfortably spend. Their number doesn't know about your daycare bill, your retirement savings, or the vacation you'd like to take without stress. A house that consumes every dollar of your approved budget is called being "house poor," and it's a genuinely miserable way to live.
A practical approach: find your maximum with this calculator, then aim for a payment 10%–15% below it. That cushion absorbs property-tax increases, repairs, and the ordinary surprises of owning a home — without forcing you to choose between the mortgage and everything else.
Don't forget the costs beyond the mortgage
- Property taxes and insurance — folded into your monthly payment through escrow, and they rise over time.
- HOA dues — if you're buying a condo or in a planned community, these count against your DTI and can be substantial.
- Maintenance — a common rule is budgeting 1% of the home's value per year for upkeep. On a $400,000 home, that's $4,000 annually.
- Closing costs — 2%–5% of the purchase price, due upfront and separate from your down payment.
Common questions
What income do lenders count?
Gross (pre-tax) income — salary, plus reliable bonuses, commissions, or self-employment income you can document over two years. One-off windfalls don't count.
Does a higher credit score let me afford more?
Indirectly, yes. A better score earns a lower interest rate, which lowers your monthly payment, which raises the price you can fit under the 28% ceiling.
Should I get pre-approved before house hunting?
Absolutely. A pre-approval confirms the real number with a lender, and sellers take offers far more seriously when a mortgage is already lined up.
How much house can I afford on my salary?
Want a quick starting point by income? These guides break down a realistic home-price range, monthly payment, and the debt/down-payment factors for common salaries:
- How much house can I afford on $50k a year?
- How much house can I afford on $60k a year?
- How much house can I afford on $75k a year?
- How much house can I afford on $80k a year?
- How much house can I afford on $100k a year?
Or skip the estimates and use the calculator above with your own numbers.