How much house can you afford by income?
| Household income | Down payment | Home price (28/36) | Monthly payment |
|---|---|---|---|
| $60,000 | $30,000 | $187,000 | $1,393 |
| $80,000 | $40,000 | $257,000 | $1,861 |
| $100,000 | $50,000 | $327,000 | $2,328 |
| $125,000 | $62,500 | $414,000 | $2,909 |
| $150,000 | $75,000 | $502,000 | $3,497 |
| $200,000 | $100,000 | $677,000 | $4,666 |
Assumes $400/month other debts, 6.5% 30-year fixed, 1.0% property tax, $2,000/year insurance, 0.6% PMI below 20% down.
How do lenders decide what you can borrow?
Lenders compare your monthly obligations to your gross (pre-tax) monthly income. The front-end ratio covers housing only; the back-end ratio, also called debt-to-income or DTI, adds every other debt payment. Whichever ratio runs out first sets your maximum. The calculator tells you which one is limiting you — if it’s total debt, paying off a car loan can raise your budget more than saving a bigger down payment.
Should you borrow the maximum?
Not necessarily. The guideline is a lender’s ceiling, not a budget. The “Comfortable” setting (25% housing, 33% total) leaves room for retirement savings, repairs — plan on about 1% of the home’s value a year — and childcare. Compare the payment to what actually lands in your account with the take-home pay calculator, and test whether buying beats renting with the rent vs buy calculator.
How this calculator works
- Your monthly gross income is multiplied by the lender ratios you choose (for example 28% for housing and 36% for all debts).
- Your existing monthly debts are subtracted from the back-end limit; the lower of the two limits is your maximum housing payment.
- The calculator searches for the highest home price whose principal, interest, property tax, insurance, HOA and PMI (when your down payment is under 20%) fit within that payment.
- Cash to close is estimated as your down payment plus closing costs of about 3% of the loan amount.
The assumptions behind each result are listed under the calculator. Full details: methodology.
Frequently asked questions
What is the 28/36 rule?
Lenders traditionally want your housing payment (principal, interest, taxes, insurance, PMI and HOA) to stay under 28% of gross monthly income, and all monthly debt payments including housing under 36%. Many approve higher ratios — up to about 43% for FHA and 45% or more for conventional loans with strong credit.
How much house can I afford on $100,000 a year?
With $400 a month in other debts, $50,000 down, a 6.5% 30-year rate, 1% property tax and $2,000 a year insurance, the 28/36 rule supports a home price of about $327,000 and a total payment near $2,328 a month.
Does the down payment change what I can afford?
Yes, in two ways. Every dollar down is a dollar you don’t borrow, and putting 20% down removes private mortgage insurance, which can add 0.3% to 1.5% of the loan per year.
What counts as monthly debt?
Minimum payments on car loans, student loans, credit cards, personal loans, and court-ordered child support or alimony. Rent, utilities, phone and insurance premiums are not counted — but they still matter for your budget.
How much do mortgage rates change affordability?
A lot. On a fixed monthly budget, each 1 percentage point increase in the rate cuts the price you can afford by roughly 10%. Change the rate in the calculator to see it for your numbers, and check current averages in Freddie Mac’s weekly survey.
Sources
Estimates for planning, not financial, tax or legal advice. CalciTools calculators use published government figures and the assumptions shown on each page. Your actual numbers depend on details we don’t model. Check important decisions with a qualified professional.