How home affordability is calculated
Lenders look at your debt-to-income ratio (DTI) — how much of your gross monthly income goes to debt. A common guideline is the 28/36 rule: spend no more than 28% of your gross income on housing, and no more than 36% on all debts combined, including car loans, student loans and credit cards.
Max housing payment = the lower of (Income × 28%) or (Income × 36% − Other debts)
This calculator finds the highest home price whose full monthly payment — principal, interest, property tax, insurance, PMI and HOA — stays within that limit.
Example
With a $100,000 salary, $500 a month in other debts, $60,000 saved for a down payment and a 6.5% rate, you can afford a home of about $341,000. That keeps your total housing payment near $2,333 a month.
Tips before you buy
- Leave a cushion. Just because a lender approves an amount doesn't mean it's comfortable. Budget for repairs — about 1% of the home's value a year.
- Keep savings after closing. Plan for closing costs (typically 2%–5% of the price) plus an emergency fund.
- Pay down debts first. Every $100 of monthly debt you clear can raise your budget by roughly $15,000.
- Get pre-approved so you know your real rate and budget before you start looking.
Common questions
How much house can I afford on a $100,000 salary?
Roughly $300,000–$400,000, depending on your debts, down payment, interest rate and local property taxes. Enter your details above for a personal estimate.
What is the 28/36 rule?
It suggests keeping housing costs under 28% of gross monthly income and total debt payments under 36%. Some loan programs allow higher ratios, but lower is safer.
How much should I have for a down payment?
Twenty percent avoids PMI, but many buyers put down 3%–10%. FHA loans allow 3.5%, and VA and USDA loans can require nothing down for eligible buyers.
Does my credit score affect how much house I can afford?
Yes. A higher score gets a lower interest rate, which lowers the monthly payment and raises the price you can afford.
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