How Much House Can I Afford?
Estimate the home price that fits your income, debts and down payment. This calculator uses the debt-to-income guidelines lenders rely on and includes property tax, insurance, PMI and HOA dues.
An estimate, not a loan approval. Lenders also look at your credit score, savings, job history and the home itself.
How this calculator works
Lenders judge affordability mostly through your debt-to-income ratio (DTI), which compares monthly debt payments with gross monthly income. The calculator applies two limits and uses whichever is lower:
- Housing limit: 28% of gross monthly incomefront-end
- Total debt limit: 36% of income, minus your other debtsback-end
The lower of the two is your maximum housing payment. From that, the calculator subtracts insurance and HOA dues, then works backward through the mortgage formula to find the price where principal, interest, property tax and any PMI fit exactly. If your down payment is under 20% of the price, PMI is added at the rate you enter.
Worked example: $75,000 income
A household earns $75,000 a year, pays $400 a month on a car loan and has $30,000 saved for a down payment. It looks at a 30-year loan at 7%, with property tax of 1.1% of the price and $1,800 a year for insurance.
- Gross monthly income: $75,000 ÷ 12$6,250
- Housing limit: 28% of $6,250$1,750
- Total debt limit: 36% of $6,250 − $400$1,850
- Maximum housing payment (the lower one)$1,750
- Affordable home price$226,898
At that price, the $196,898 loan costs $1,309.97 a month in principal and interest. Property tax adds $207.99, insurance $150.00 and PMI about $82.04, for a total of $1,750. Using the 31/43 guideline instead raises the housing limit and the price, but the payment would take a bigger share of the paycheck.
Affordable home price by income
Using the same assumptions as the example: $400 a month in other debt, $30,000 down, a 30-year loan at 7%, 1.1% property tax, $1,800 insurance and the 28/36 guideline.
| Yearly income | Max housing payment | Affordable price |
|---|---|---|
| $60,000 | $1,400 | $183,074 |
| $75,000 | $1,750 | $226,898 |
| $100,000 | $2,333 | $299,939 |
| $125,000 | $2,917 | $372,981 |
| $150,000 | $3,500 | $446,022 |
Each extra $25,000 of income adds roughly $73,000 of buying power under these assumptions. A lower rate, a bigger down payment or lower property taxes would move every number up.
How to afford more house, safely
- Pay down other debts first. Clearing a $400 car payment frees up room under the 36% limit. The Credit Card Payoff Calculator helps with card balances.
- Save a bigger down payment. It lowers the loan and, at 20% on a conventional loan, removes PMI.
- Improve your credit score. A better rate raises the price the same payment can support.
- Look at property taxes by area. Two homes at the same price can have very different tax bills.
- Keep a buffer. Plan for maintenance, often estimated at around 1% of the home's value a year, and keep an emergency fund after closing.
Once you have a price in mind, use the Mortgage Calculator to see the full payment and amortization schedule for a specific home.
Frequently asked questions
How much house can I afford?
A common starting point is the 28/36 rule: keep your total housing payment at or below 28% of gross monthly income and all debt payments at or below 36%. On a $75,000 income with $400 of other monthly debt, $30,000 down and a 7% rate, that points to a home price of about $227,000.
What is the 28/36 rule?
The 28/36 rule says your housing costs, including principal, interest, taxes and insurance, should be no more than 28% of your gross monthly income, and your total monthly debt payments, including housing, should be no more than 36%.
What debt-to-income ratio do lenders allow?
Limits vary by loan type and lender. Many conventional loans allow total debt-to-income ratios up to around 43% to 45%, and sometimes higher with strong credit and reserves. FHA guidelines often use 31% for housing and 43% for total debt as a benchmark.
Does the down payment change how much house I can afford?
Yes. A larger down payment reduces the amount you borrow, so the same monthly payment supports a higher home price. Reaching 20% down on a conventional loan also avoids private mortgage insurance, which frees up more of the budget.
Should I buy the most expensive house I qualify for?
Not necessarily. The amount a lender approves is a maximum, not a target. Leave room for maintenance, savings, emergencies and other goals. Many buyers aim below their maximum so the payment stays comfortable.
This calculator is for educational purposes only and is not financial advice or a loan approval. Lending rules, rates, taxes and insurance vary. A lender will review your full application, and closing costs are not included here.