How much house can you afford?

A quick rule gets you close, but your real budget depends on your debts, your down payment and the costs people forget. Here is how to find your number.

By the Calculator Den team · Updated 2026-09-16

Buying a home is the biggest purchase most people ever make, so the question that keeps buyers awake is a fair one: how much house can I actually afford? There is a quick rule that gets you in the right area, and then a more honest method that gives you a number you can trust. Here is both, plus the costs that quietly shrink your budget if you forget them.

The short answer: 3 to 5 times your income

As a first pass, most buyers can afford a home priced at roughly 3 to 5 times their gross annual income. The low end assumes you carry other debt or put down a small deposit. The high end assumes a large down payment, strong credit, and little other debt. So a household earning 90,000 a year is usually looking at a home somewhere between about 270,000 and 450,000, depending on the rest of their finances.

That is a wide range on purpose, because the price you can afford is not really about the sticker price at all. It is about the monthly payment, and whether it fits alongside everything else you have to pay. That is what the next rule measures.

The 28/36 rule, explained

The most widely used affordability guideline in home lending is the 28/36 rule. It has two halves. The first, the 28% part, says your total monthly housing payment should stay at or below 28% of your gross monthly income, the amount before tax. The second, the 36% part, says all your monthly debt payments together, housing plus car loans, student loans and minimum card payments, should stay at or below 36% of gross income.

That second number is your debt-to-income ratio, or DTI, and it is the figure lenders care about most. It is a guideline rather than a law: many lenders will stretch to a DTI of around 43 to 45% on a conventional loan, and government-backed loans can go higher still. But 28/36 is the line that keeps a home comfortable rather than tight, which is the number you actually want to live with.

What actually counts as your housing payment

A common mistake is to plan around the mortgage repayment alone. Lenders look at the full housing cost, often called PITI: principal, interest, taxes and insurance. That means the loan repayment, the property taxes, and the home insurance, all rolled together. Where it applies, private mortgage insurance and any building or association fees go in too.

This matters because taxes and insurance can add a meaningful chunk on top of the raw mortgage figure. Two homes with the same asking price can carry very different monthly costs once local property taxes are counted, so always run the affordability sum on the full payment, not just the loan.

How your down payment changes everything

Your down payment is the cash you put in up front, and it moves the affordability number more than almost anything else. The more you put down, the less you borrow, the lower your monthly payment, and the more house the same income can carry. A larger deposit also lowers your loan-to-value ratio, which is the size of your loan compared with the price of the home, and a lower ratio usually earns you a better interest rate.

You will often hear that you need 20% down. That is not a hard requirement, and plenty of buyers put down less. What 20% does is let you avoid private mortgage insurance, an extra monthly cost lenders add when your deposit is smaller to protect themselves. So a smaller deposit is entirely possible, it just means a higher monthly payment and, usually, that extra insurance until you build enough equity.

How your other debts shrink the number

This is the part the quick rules miss, and it is why two people on the same salary can afford very different homes. Because lenders cap your total debt payments at around 36% of income, every other repayment you already have eats directly into what is left for a mortgage. A big car loan or a heavy student loan payment can knock a surprising amount off the home you qualify for.

The upside is that it works in reverse too. Clearing a card balance or finishing a car loan before you apply frees up room under that 36% ceiling and can lift your budget without you earning an extra cent. If you are a year or two from buying, paying debt down is one of the most effective things you can do to afford more house.

A worked example

Take a household earning 90,000 a year, which is 7,500 a month gross. The 28% rule puts their comfortable housing payment at about 2,100 a month. The 36% rule says all their debts together should stay under about 2,700 a month, so if they already pay 500 a month on a car and student loan, that leaves roughly 2,200 for housing, and the lower of the two figures wins.

So around 2,100 a month is their target payment. What price that buys depends on the interest rate and the down payment, but with a reasonable deposit it points to a home in that 3-to-5x range from earlier. Change any input, a bigger deposit, a lower rate, less existing debt, and the number moves. That is exactly what a mortgage calculator is for: you plug in the payment you are comfortable with and see the price it supports.

The honest method, in four steps

Rules of thumb are a starting point. Here is how to find your own real number.

First, take your gross monthly income and work out 28% of it. That is your comfortable ceiling for the full housing payment, including taxes and insurance.

Second, add up every other monthly debt payment you have, then check that this plus your planned housing payment stays under 36% of your income. If it does not, the housing figure has to come down.

Third, decide your down payment honestly, and remember to keep enough cash aside for closing costs and an emergency fund rather than emptying your savings into the deposit.

Fourth, pressure-test the payment against your actual life, not just the ratios. If 28% of gross would leave you with nothing after your real spending and savings, the comfortable number is lower, and there is no shame in buying below what a lender will approve.

Do not forget the costs beyond the mortgage

The purchase price is only part of the story, and the extras catch first-time buyers out. Budget for them before you commit:

• Closing costs, the one-off fees to complete the purchase, which typically run to a few percent of the price and are paid on top of your deposit.
• Property taxes and home insurance, which are ongoing and already sit inside the PITI figure, but are easy to underestimate.
• Maintenance and repairs, since a home you own has no landlord. Setting aside roughly 1% of the home's value a year is a common rule for upkeep.
• Moving, furnishing and higher utility bills if you are trading up to more space than you rented.

Put it together and the answer to how much house you can afford is not a single sticker price, it is the monthly payment that fits comfortably inside your income and your life. Start with the 28/36 rule, adjust for your debts and deposit, and run the numbers on the payment rather than the price. Do that and you buy a home that supports your life instead of squeezing it.