How Much House Can I Afford?
Enter your income, monthly debts, and down payment to estimate the maximum home price you can afford. Our calculator uses the 28/36 rule that lenders rely on to determine your borrowing power.
How to Use This Calculator
- Enter your annual gross (pre-tax) household income.
- Add your total monthly debt payments (car loans, student loans, credit cards, etc.).
- Input your available down payment amount.
- Set the expected interest rate and loan term.
- Adjust property tax and insurance estimates for your area.
- Review your maximum affordable home price and comfortable budget range.
How Affordability Is Calculated
Lenders use two key ratios to determine how much you can borrow:
Front-end ratio (28%): Monthly housing costs ÷ Gross monthly income ≤ 28%
Back-end ratio (36%): (Housing costs + all debts) ÷ Gross monthly income ≤ 36%
The calculator finds the maximum home price where both ratios stay within acceptable limits. Some loan programs (FHA, VA) allow higher ratios up to 43–50% on the back end.
Example Scenarios
Single Income — $75,000/year
Monthly debts: $400 (car + student loans) · Down payment: $30,000 · Rate: 6.75%
Max monthly housing: $1,750 (28% rule) · Max total debt: $2,250 (36% rule)
Affordable home price: ~$270,000–$290,000
Dual Income — $140,000/year combined
Monthly debts: $800 · Down payment: $80,000 · Rate: 6.5%
Max monthly housing: $3,267 (28% rule) · Max total debt: $4,200 (36% rule)
Affordable home price: ~$480,000–$520,000
First-Time Buyer — $55,000/year, FHA loan
Monthly debts: $250 · Down payment: $12,000 (3.5%) · Rate: 6.75% · FHA (43% back-end)
Max monthly housing: $1,283 (28% rule)
Affordable home price: ~$190,000–$220,000
Tips to Increase Your Buying Power
- Pay off or pay down existing debts before applying — this directly increases your max loan.
- Boost your credit score above 740 to qualify for the lowest interest rates.
- Save a larger down payment to reduce the loan amount and eliminate PMI.
- Consider areas with lower property taxes to stretch your budget further.
- Include all household income sources (bonuses, rental income, side income).
- Keep 3–6 months of expenses in reserves after your down payment.
Frequently Asked Questions
How much house can I afford on my salary?
A common guideline is that total monthly housing costs should not exceed 28% of your gross monthly income. For a $75,000 salary, that's about $1,750/month, supporting a home price of roughly $270,000–$310,000 depending on rate, taxes, and debts.
What is the 28/36 rule?
The 28/36 rule says you should spend no more than 28% of gross income on housing costs (front-end) and no more than 36% on all debt payments combined (back-end). Most conventional lenders use these ratios as qualifying thresholds.
Do lenders use gross or net income?
Lenders use gross (pre-tax) income for qualification. However, budgeting based on net income is wise to ensure payments remain comfortable after taxes.
How does debt affect how much house I can afford?
Every dollar of monthly debt reduces your borrowing power. For example, $500/month in car payments could reduce your maximum home price by $60,000–$75,000.
What income do I need for a $500,000 house?
With 20% down at 6.75%, you'd need about $137,000 gross annual income assuming minimal other debts. With 10% down and PMI, you'd need closer to $155,000.