How much house you can afford depends on three things: your income, your debts, and your down payment. Lenders use the 28/36 rule — spend no more than 28% of gross income on housing, no more than 36% on all debts. This guide gives you the exact numbers for every income level, home price, and down payment scenario.
The 28/36 Rule: How Lenders Decide What You Can Afford
Banks don’t just look at your salary. They evaluate two ratios:
| Ratio | What It Measures | Maximum |
|---|---|---|
| Front-end (28%) | Housing costs ÷ gross monthly income | 28% |
| Back-end (36%) | All debt payments ÷ gross monthly income | 36% |
Housing costs include your mortgage payment (principal + interest), property taxes, homeowner’s insurance, and PMI if applicable. All debt payments add car payments, student loans, credit card minimums, and other monthly obligations.
Example: You earn $80,000/year ($6,667/month). The 28% rule means your maximum housing payment is $1,867. If you also have a $400/month car payment and $300/month in student loans, your total debts should stay under $2,400 (36% of $6,667).
Some lenders allow up to 43% or even 50% back-end ratios for qualified borrowers, especially with FHA loans. But just because a bank will lend you more doesn’t mean you should borrow it. The 28% rule exists because going higher leaves you financially fragile. A clear household budget helps you determine what you can comfortably afford.
How Much House Can I Afford by Income
Here’s the maximum affordable home price at each income level, assuming 10% down, 6.5% interest rate, and the 28% housing ratio:
| Annual Income | Max Monthly Payment (28%) | Estimated Home Price | Detailed Guide |
|---|---|---|---|
| $30,000 | $700 | ~$100,000 | Full breakdown |
| $40,000 | $933 | ~$140,000 | Full breakdown |
| $50,000 | $1,167 | ~$180,000 | Full breakdown |
| $55,000 | $1,283 | ~$200,000 | Full breakdown |
| $60,000 | $1,400 | ~$215,000 | Full breakdown |
| $65,000 | $1,517 | ~$235,000 | Full breakdown |
| $70,000 | $1,633 | ~$255,000 | Full breakdown |
| $75,000 | $1,750 | ~$275,000 | Full breakdown |
| $80,000 | $1,867 | ~$295,000 | Full breakdown |
| $90,000 | $2,100 | ~$335,000 | Full breakdown |
| $95,000 | $2,217 | ~$350,000 | Full breakdown |
| $100,000 | $2,333 | ~$370,000 | Full breakdown |
| $110,000 | $2,567 | ~$410,000 | Full breakdown |
| $120,000 | $2,800 | ~$450,000 | Full breakdown |
| $130,000 | $3,033 | ~$490,000 | Full breakdown |
| $150,000 | $3,500 | ~$570,000 | Full breakdown |
| $175,000 | $4,083 | ~$665,000 | Full breakdown |
| $200,000 | $4,667 | ~$760,000 | Full breakdown |
| $225,000 | $5,250 | ~$860,000 | Full breakdown |
| $250,000 | $5,833 | ~$955,000 | Full breakdown |
| $275,000 | $6,417 | ~$1,050,000 | Full breakdown |
Remember: These estimates assume minimal other debts. If you have car payments or student loans, your affordable home price drops. Each income guide above includes detailed scenarios with and without existing debts.
Want a more tailored estimate? Also see:
- How Much House on $50K
- How Much House on $75K
- How Much House on $100K
- How Much House on $150K
- How Much House on $200K
Income Needed by Home Price
Working backward — if you know what a home costs in your market, here’s the income you need:
| Home Price | Down Payment (20%) | Loan Amount | Monthly Payment* | Income Needed | Detailed Guide |
|---|---|---|---|---|---|
| $200,000 | $40,000 | $160,000 | $1,264 | ~$54,000 | Full breakdown |
| $250,000 | $50,000 | $200,000 | $1,580 | ~$68,000 | Full breakdown |
| $300,000 | $60,000 | $240,000 | $1,897 | ~$81,000 | Full breakdown |
| $350,000 | $70,000 | $280,000 | $2,213 | ~$95,000 | Full breakdown |
| $400,000 | $80,000 | $320,000 | $2,529 | ~$108,000 | Full breakdown |
| $450,000 | $90,000 | $360,000 | $2,845 | ~$122,000 | Full breakdown |
| $500,000 | $100,000 | $400,000 | $3,161 | ~$136,000 | Full breakdown |
| $550,000 | $110,000 | $440,000 | $3,477 | ~$149,000 | Full breakdown |
| $600,000 | $120,000 | $480,000 | $3,793 | ~$163,000 | Full breakdown |
| $650,000 | $130,000 | $520,000 | $4,109 | ~$176,000 | Full breakdown |
| $700,000 | $140,000 | $560,000 | $4,426 | ~$190,000 | Full breakdown |
| $750,000 | $150,000 | $600,000 | $4,742 | ~$203,000 | Full breakdown |
| $800,000 | $160,000 | $640,000 | $5,058 | ~$217,000 | Full breakdown |
| $1,000,000 | $200,000 | $800,000 | $6,322 | ~$271,000 | Full breakdown |
*Monthly payment at 6.5% rate, including estimated taxes and insurance (~1.5% of home value annually). Income needed based on the 28% rule.
Also see our Income to Afford a Home Calculator and General Income-to-Home Guide.
Monthly Payment by Mortgage Size
Already know your loan amount? Here’s what you’ll pay each month:
| Mortgage Amount | Monthly P&I (6.5%, 30-yr) | Monthly P&I (7.0%, 30-yr) | Detailed Guide |
|---|---|---|---|
| $200,000 | $1,264 | $1,331 | Full breakdown |
| $250,000 | $1,580 | $1,663 | Full breakdown |
| $300,000 | $1,897 | $1,996 | Full breakdown |
| $350,000 | $2,213 | $2,329 | Full breakdown |
| $400,000 | $2,529 | $2,661 | Full breakdown |
| $450,000 | $2,845 | $2,994 | Full breakdown |
| $500,000 | $3,161 | $3,327 | Full breakdown |
| $600,000 | $3,793 | $3,992 | Full breakdown |
| $700,000 | $4,426 | $4,657 | Full breakdown |
| $800,000 | $5,058 | $5,323 | Full breakdown |
| $900,000 | $5,690 | $5,988 | Full breakdown |
| $1,000,000 | $6,322 | $6,653 | Full breakdown |
| $1,500,000 | $9,483 | $9,980 | Full breakdown |
These are principal and interest only. Add property taxes, insurance, and PMI (if applicable) for true monthly costs. For amortization schedules showing how each payment splits between principal and interest, use our Amortization Calculator.
For rate comparisons: 30-Year Mortgage Rates | 15-Year Mortgage Rates | 15-Year vs 30-Year
How Down Payment Changes Your Affordability
The same income supports very different home prices depending on what you put down:
| Down Payment | Home Price on $100K Income | Loan Amount | PMI? | Monthly Savings vs 3% Down |
|---|---|---|---|---|
| 3% | ~$340,000 | $329,800 | Yes (~$165/mo) | — |
| 5% | ~$355,000 | $337,250 | Yes (~$140/mo) | $25/mo |
| 10% | ~$375,000 | $337,500 | Yes (~$110/mo) | $55/mo |
| 15% | ~$400,000 | $340,000 | Yes (~$85/mo) | $80/mo |
| 20% | ~$420,000 | $336,000 | No | ~$165/mo |
PMI (Private Mortgage Insurance) is required when you put less than 20% down. It typically costs 0.5%–1% of the loan amount annually and falls off once you reach 20% equity. Despite the extra cost, buying with less than 20% down can make sense when:
- Home prices are rising faster than you can save
- You have a strong emergency fund and stable income
- Renting costs more than owning with PMI included
See our Average Down Payment Guide and Down Payment Assistance Programs for help with the upfront cost. Also see Average Closing Costs — these typically add 2-5% on top of your down payment.
Costs Most Buyers Forget
The mortgage payment is just the start. These additional costs can add 30-50% to your monthly housing expense:
| Hidden Cost | Typical Amount | Annual Total |
|---|---|---|
| Property taxes | 0.5%–2.5% of home value | $2,000–$10,000 |
| Homeowner’s insurance | $1,500–$3,500/year | $1,500–$3,500 |
| PMI (if <20% down) | 0.5%–1% of loan amount | $1,500–$4,000 |
| HOA fees | $200–$500/month (if applicable) | $2,400–$6,000 |
| Maintenance & repairs | 1%–2% of home value | $4,000–$10,000 |
| Utilities | $200–$400/month | $2,400–$4,800 |
On a $400,000 home, these extras can add $1,000–$2,500 per month on top of your mortgage. Factor these in when calculating what you can actually afford.
See: Average Home Maintenance Costs | Hidden Costs of Buying a Home | Cost of Owning a Home | Tax Deductions for Homeowners
Affordability by State
The same salary buys very different homes depending on where you live. Median home prices and the salary needed to afford them in popular states:
| State | Median Home Price | Salary Needed | Detailed Guide |
|---|---|---|---|
| Texas | ~$300,000 | ~$81,000 | Salary to buy in Texas |
| Florida | ~$380,000 | ~$103,000 | Salary to buy in Florida |
| Georgia | ~$320,000 | ~$87,000 | Salary to buy in Georgia |
| North Carolina | ~$330,000 | ~$89,000 | Salary to buy in North Carolina |
| Arizona | ~$390,000 | ~$106,000 | Salary to buy in Arizona |
| Virginia | ~$400,000 | ~$108,000 | Salary to buy in Virginia |
| Colorado | ~$520,000 | ~$141,000 | Salary to buy in Colorado |
| Washington | ~$570,000 | ~$154,000 | Salary to buy in Washington |
| New York | ~$430,000 | ~$116,000 | Salary to buy in New York |
| California | ~$750,000 | ~$203,000 | Salary to buy in California |
For city-level data: Average Home Price by State | Average Home Price by City
Also see American Dream Affordability for how housing costs have changed over time, and Home Cost-to-Income Ratio for tracking affordability trends.
Buying With a Partner: Combined Income
Dual-income households can afford significantly more. Here’s how combined incomes change the picture:
| Combined Income | Max Home Price (28% rule) | Detailed Guide |
|---|---|---|
| $100,000 | ~$370,000 | Full breakdown |
| $150,000 | ~$570,000 | Full breakdown |
| $200,000 | ~$760,000 | Full breakdown |
| $250,000 | ~$955,000 | Full breakdown |
Important: Lenders look at both incomes for qualification, but also both debts. If one partner has high student loans or car payments, it can offset the benefit of the second income.
When Renting Makes More Sense
Buying isn’t always the right financial move. Consider renting if:
- You’ll move within 3-5 years — transaction costs (closing costs, realtor fees) mean you need time to break even
- Home price-to-rent ratio exceeds 20 — if a $400,000 home rents for $1,500/month, the ratio is 22, favoring renting
- You have high-interest debt — paying off 20% credit card debt delivers a guaranteed return that likely beats home appreciation
- You haven’t built an emergency fund — homeownership has expensive surprises
See Rent vs Buy Calculator and Renting vs Buying a House for a detailed comparison.
Mortgage Calculators and Tools
Run the numbers for your exact situation with these calculators:
| Calculator | What It Does | Link |
|---|---|---|
| Mortgage Affordability | Estimates home price from your income, debts, and down payment | Use calculator |
| Income to Afford Home | Works backward from home price to income needed | Use calculator |
| Mortgage Payment | Monthly P&I for any loan amount, rate, and term | Use calculator |
| Amortization | Year-by-year breakdown of principal vs interest | Use calculator |
| Bi-Weekly Payment | Shows savings from biweekly vs monthly payments | Use calculator |
| Refinance | Compare current mortgage to refinance scenario | Use calculator |
For current rates, see our Mortgage Rates Guide, 30-Year Mortgage Rates, and FHA Loan Rates.
Ready to buy? See our First-Time Home Buyer Guide and Home Buying Checklist.
Quick Reference Table
| Topic | Key Number | Learn More |
|---|---|---|
| Max housing payment | 28% of gross income | Mortgage affordability calculator |
| Max total debt | 36% of gross income | How much house on your salary |
| PMI threshold | 20% down to avoid | Average down payment |
| Average closing costs | 2–5% of home price | Closing costs guide |
| Annual maintenance | 1–2% of home value | Maintenance costs |
| 30-year rate (current) | ~6.5% | 30-year rates |
| 15-year rate (current) | ~5.8% | 15-year rates |
The Bottom Line
The 28% rule is your starting point: multiply your gross monthly income by 0.28 for your maximum housing payment. But the real answer depends on your down payment, existing debts, local property taxes, and what you’re comfortable spending. Use the income-specific guides above for a personalized breakdown, and remember — just because a bank approves you for a certain amount doesn’t mean you should borrow that much. The best mortgage is one that still lets you save 15-20% of your income for retirement.
Affordability Decision Framework
If you are payment-constrained
- Reduce price band first.
- Compare a larger down payment versus preserving liquidity.
- Use the Mortgage Affordability Calculator for stress testing.
If you are cash-constrained
- Prioritize closing reserves and emergency fund.
- Test lower down payment with PMI versus waiting to save more.
- Review PMI Guide and Average Down Payment.
If rates are your main concern
- Run affordability at current rate and +1% scenario.
- Evaluate if the home still works without assuming a future refinance.
- Use Mortgage Rate History for context, not prediction.
Stress-Testing Payment Durability
| Scenario | Assumption | Use |
|---|---|---|
| Base case | Current quoted rate + expected tax/insurance | Initial home-price band |
| Rate stress | +1.0% rate | Determines risk tolerance |
| Cost stress | +15% insurance/tax/utility burden | Tests post-close durability |
| Income stress | 10–15% temporary income drop | Validates emergency runway |
A home is meaningfully affordable when all four scenarios are survivable without high-interest debt.
Buyer Readiness Framework
Rate each of these as strong, moderate, or weak before locking a target budget:
- Income stability: Is household income predictable over 12 to 24 months?
- Cash reserves: Will you keep emergency and maintenance buffers after closing?
- Debt position: Do current obligations limit flexibility if one income changes?
- Time horizon: Are you likely to stay long enough to absorb transaction costs?
- Repair tolerance: Can you absorb expected and unexpected ownership costs?
If two or more areas are weak, reduce budget range or delay until the risk profile improves.
Common Affordability Mistakes
- Shopping by lender pre-approval maximum instead of personal comfort range.
- Using teaser assumptions for tax, insurance, and maintenance.
- Exhausting cash reserves for the down payment.
- Ignoring commute and utility cost changes.
- Assuming refinancing will always be available quickly.
12-Month Post-Purchase Stabilization Plan
- Keep non-essential upgrades limited in the first six months.
- Rebuild any emergency-fund drawdown immediately.
- Track full housing cost monthly, not just principal and interest.
- Reprice insurance and recurring contracts after closing.
- Re-evaluate principal prepayment only after buffers are restored.
Core Affordability Cluster
- Mortgage Affordability Calculator
- Income Needed for Home
- Income Afford Home Calculator
- PMI Guide
- Average Down Payment
- House Down Payment Guide
- How to Save for a Down Payment
- Mortgage Affordability Gap
- American Dream Affordability
Income-needed by home price
- Income Needed for $300K House
- Income Needed for $400K House
- Income Needed for $500K House
- Income Needed for $600K House
- Income Needed for $750K House
- Income Needed for $1M House
Related mortgage hubs
See parent hub: Mortgages
Phase 3 Cross-Market: Mortgage Affordability
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