How Much House Can I Afford?
How much house you can afford depends on far more than the price tag: your income, existing debts, deposit and the interest rate all shape what is comfortable. Here is how lenders and sensible buyers think about it.
The 28/36 rule
A common guideline says your housing payment should stay under about 28% of your gross monthly income, and all your debt payments together under about 36%. Staying inside those limits keeps the loan affordable and improves your chances of approval.
What moves the number
- Income: higher income supports a larger payment, within the 28/36 limits.
- Existing debts: car loans and cards eat into the 36%, lowering what is left for a mortgage. Check your debt-to-income ratio.
- Down payment: a bigger deposit means a smaller loan and can avoid mortgage insurance. See the Down Payment Calculator.
- Interest rate and term: a higher rate or shorter term raises the monthly payment for the same price.
How to work out your range
Start from a comfortable monthly payment, then work backward to a loan size and add your deposit. The Mortgage Calculator shows the full monthly cost including tax and insurance, so you can test different prices until the payment fits your budget.
The tools to use
Combine the Mortgage Calculator, Debt-to-Income Calculator and Down Payment Calculator to build a realistic, affordable picture.
Frequently asked questions
What is the 28/36 rule?
Keep your housing payment under about 28% of gross monthly income, and all debt payments under about 36%. It keeps a mortgage affordable.
How much deposit do I need?
20% avoids mortgage insurance in many countries, but lower is possible. A bigger deposit means a smaller loan and lower payments.
Do my other debts affect how much I can borrow?
Yes. Existing loans and cards raise your debt-to-income ratio, which lowers how much a lender will offer.