Money · home
How Much House Can I Afford?
By the Dailycaltor team · formula-verified · last updated July 2026
A realistic home price for your income.
Details
Formula
The 28/36 rule: housing payment should stay under 28% of gross monthly income, and total debt payments under 36%. The lower of the two limits sets your max payment, which converts to a loan amount at your rate over 30 years; add the down payment for the home price.
Worked examples
- $90,000 income, $400 debts, $40,000 down at 6.5% → roughly a $370k–$390k home.
- Cutting monthly debts by $300 raises affordable price by tens of thousands.
- A bigger down payment adds to price dollar-for-dollar.
Common mistakes
- Maxing the limit — taxes, insurance and maintenance sit on top of the loan payment.
- Ignoring existing debts, which the 36% back-end limit counts.
- Using pre-tax income mentally as spendable money.
Source: Standard 28/36 lending guideline. Last updated: July 2026. Educational estimates only.
Questions
How much house can I afford on my salary?
A common rule: keep the housing payment under 28% of gross monthly income and all debts under 36%. Enter your numbers above.
Does this include property tax and insurance?
No — lenders count them inside the 28%, so treat this as an upper bound and budget below it.
How much do I need for a down payment?
Conventional loans often want 20% to avoid PMI, but many buyers put down 3–10% with PMI added.
Does my credit score matter?
Yes — it sets your rate, and a 1% higher rate cuts what you can afford by roughly 10%.
Is the 28/36 rule strict?
It is a guideline lenders commonly use; some programs allow higher ratios with strong credit.