Last updated: March 2026
How to Figure Out What You Can Afford
"How much house can I afford?" is the first question every home buyer asks — and the answer depends on more than just your salary. This calculator uses the 28/36 debt-to-income rule that real mortgage lenders apply to determine your maximum home price.
The front-end ratio (28%) caps your total housing costs — principal, interest, taxes, insurance, PMI, and HOA — at 28% of gross monthly income. The back-end ratio (36%) caps all debt payments (housing plus existing debts) at 36%. Your effective limit is the lower of the two.
Existing debts have an outsized impact on affordability. With the same $80,000 salary, someone with no debts can afford approximately $350,000, while someone paying $1,000/month in car and student loans may only qualify for $250,000. Paying down debt before buying often increases purchasing power more than saving extra for a down payment.
Your credit score also matters significantly. Excellent credit (740+) can save 0.25-0.5% on your rate compared to average, while poor credit adds 1%+ — translating to $20,000-$40,000 in purchasing power on a typical loan. Check your credit report for errors and work to improve your score before applying.
Remember: what you can borrow and what you should borrow are different. Banks approve based on maximum repayment capacity, not your comfort level. The "conservative" 25% DTI scenario in this calculator shows what most financial planners recommend for long-term financial health.
Frequently Asked Questions
How much house can I afford on $100,000 salary?
Using the 28% DTI rule, your max housing payment is $2,333/month ($100K / 12 x 0.28). At 6.5% for 30 years with 20% down, that supports a home around $390,000-$420,000 depending on local taxes and insurance. With significant monthly debts, the 36% back-end rule may reduce this.
How much house can I afford on $50,000 salary?
At $50,000/year, your gross monthly income is $4,167. The 28% rule gives a max housing payment of $1,167/month. At 6.5% for 30 years with 10% down, that supports roughly a $170,000-$190,000 home. FHA loans with 3.5% down may extend your range slightly, but PMI will increase monthly costs.
What income do I need for a $300,000 house?
For a $300,000 home with 20% down at 6.5% for 30 years, total monthly housing costs run approximately $1,800-$2,000 (including taxes and insurance). Using the 28% rule, you would need a gross annual income of at least $77,000-$86,000, assuming minimal existing debts.
Can I afford a house with student loan debt?
Yes, but student loans reduce your buying power. Lenders count your monthly student loan payment in the back-end DTI ratio (36% limit). For example, $400/month in student loans on a $75,000 salary reduces your max home price by roughly $55,000-$65,000 compared to someone with the same income and no student debt.
How much should I save for a down payment?
While 20% down avoids PMI and gets the best rates, many buyers purchase with 3-10% down. FHA requires just 3.5%, and VA loans need 0% down. The tradeoff: smaller down payments mean higher monthly costs (PMI + larger loan). Save enough to cover the down payment plus 2-5% for closing costs and 3-6 months of expenses as reserves.