How Much House Can I Afford?

"How much house can I afford?" is the first question every home buyer asks — and getting it right saves you from falling in love with homes outside your budget or, worse, buying more than you can comfortably handle. The answer comes down to your income, your existing debts, your down payment, and a simple rule lenders have used for decades.

The 28/36 rule

Most lenders use the 28/36 rule to decide how much you can borrow. It's the foundation of mortgage qualification:

• The 28% (front-end ratio): Your total monthly housing payment — principal, interest, taxes, and insurance — shouldn't exceed 28% of your gross monthly income.
• The 36% (back-end ratio): All your monthly debt payments combined — housing plus car loans, student loans, credit cards — shouldn't exceed 36% of your gross monthly income.

Some loan programs allow higher ratios (FHA loans often go up to 43% or even higher with strong credit), but 28/36 is the classic guideline for a comfortable budget.

A real example

Say you earn $90,000 a year — that's $7,500 gross per month. Here's what the rule allows:

Rule	Calculation	Monthly Limit
28% housing	$7,500 × 0.28	$2,100
36% total debt	$7,500 × 0.36	$2,700

So your total housing payment should stay under $2,100/month, and if you have $400/month in car and student loan payments, your housing budget drops to $2,300 under the back-end rule — meaning the 28% limit of $2,100 is your real ceiling.

What affects how much you can afford?

Your income

Lenders look at your gross (pre-tax) income. More income means a bigger budget — but remember the qualification amount is a maximum, not a target. Just because you qualify for it doesn't mean you should spend it all.

Your existing debts

Every monthly debt payment reduces what you can borrow. Paying down a car loan or credit cards before applying can meaningfully increase your home budget. Check your ratios with our DTI calculator.

Your down payment

A larger down payment means a smaller loan, lower monthly payments, and often no PMI (at 20% down on a conventional loan). It directly increases the price range you can afford.

Interest rates

Higher rates mean higher monthly payments for the same loan amount — which lowers your maximum price. Even a 1% rate change can shift your budget by tens of thousands of dollars.

Property taxes and insurance

These are part of your monthly payment and count toward the 28% limit. In high-tax or high-insurance areas (like Florida), they take a bigger bite out of your housing budget.

Don't forget the hidden costs

Qualifying for a mortgage is only part of affordability. Budget for:

• Closing costs — typically 2–5% of the loan (see our closing cost estimator)
• Moving expenses and immediate home needs
• Maintenance and repairs — budget ~1% of home value per year
• An emergency fund — don't drain your savings to buy

Find My Home Budget