How Much House Can I Afford?
"How much house can I afford?" is really two questions: how much a lender will approve, and how much you can comfortably live with. They're rarely the same number — and the gap is where a lot of buyers get into trouble.
The 28/36 rule
Most lenders start with a guideline called the 28/36 rule, built from two debt-to-income ratios:
- Front-end ratio (28%): your total monthly housing payment — principal, interest, property taxes, and insurance (PITI) — should stay at or below 28% of your gross monthly income.
- Back-end ratio (36%): all your monthly debt payments combined — housing plus car loans, student loans, and minimum credit card payments — should stay at or below 36%.
Your affordable payment is whichever of those two limits is lower. On an $8,000/month gross income, that's a housing payment around $2,240 (28%) — unless existing debt pushes the back-end limit lower.
Quick math: on a $96,000 salary with $500/month of other debt and $40,000 saved for a down payment, the 28/36 rule supports a home price of roughly $310,000 at today's rates.
See your own number in seconds: the house affordability calculator works backward from your income, debts, and down payment to a home price.
What lenders actually check
The 28/36 rule is a starting point, not a hard limit. Underwriters also weigh:
- Credit score — it sets your interest rate, which changes your payment more than most people expect.
- Down payment — a bigger one shrinks the loan and, at 20%, eliminates PMI (see the down payment calculator).
- Loan program — FHA loans can approve back-end ratios up to 43%–50% with compensating factors, while conventional loans are stricter.
- Cash reserves — savings left after closing reassure lenders you can weather a rough patch.
This is why you can be "approved" for far more than the 28/36 rule suggests. Approval is a ceiling, not a recommendation.
Approved vs. comfortable
A payment at the very top of what you qualify for leaves no room for the real costs of owning: maintenance (budget about 1% of the home's value per year), rising property taxes and insurance, and the occasional emergency. A house that stretches you to the limit turns every surprise into a crisis.
A more sustainable approach: aim your payment at or below the conservative 28% front-end figure even if you qualify for more, keep a full emergency fund after closing, and make sure your debt-to-income ratio leaves breathing room.
Down payment and interest rate: the two big levers
Two inputs move your budget more than anything else. A larger down payment both adds to your price ceiling and can remove PMI. And the interest rate has an outsized effect: on a $320,000 loan, one extra percentage point adds roughly $215 to the monthly payment and about $77,000 of interest over 30 years. Shopping lenders and improving your credit score before you buy can be worth more than months of extra saving.
A simple plan
- Estimate your budget with the affordability calculator using the conservative setting.
- Price real homes with the mortgage calculator, including taxes, insurance, and PMI.
- Check your DTI and pay down a debt or two if you're over 36%.
- Confirm you'll still have an emergency fund after the down payment and closing costs.
Do that, and "how much house can I afford" stops being a guess — and the answer is one you can actually live with.
This article is general educational information, not financial advice. Loan qualification depends on your full financial picture and lender criteria. Last reviewed: July 2026.