How Much House Can I Afford in 2026? Calculator + 28/36 Rule Explained
Wondering how much house you can afford? The answer depends on your income, debts, down payment, and credit score. Use the 28/36 rule to calculate your maximum home price, then see real examples by income level ($50K to $200K+).
⚡ Quick Affordability by Income
$50K Income
$175K-$200K
Home price range
$100K Income
$375K-$425K
Home price range
$150K Income
$575K-$650K
Home price range
*Assumes 20% down, 6.5% rate, minimal other debts, good credit
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The 28/36 Rule: Industry Standard
The 28/36 rule is the gold standard for determining how much house you can afford. It's used by lenders, financial advisors, and the Consumer Financial Protection Bureau.
📐 THE 28/36 RULE:
28% Rule (Front-End Ratio):
Your housing payment (PITI) should be ≤28% of gross monthly income.
PITI = Principal + Interest + Taxes + Insurance
36% Rule (Back-End Ratio):
Your total debt payments should be ≤36% of gross monthly income.
Total debt = Housing + Car + Student Loans + Credit Cards + Other
Example: $100K Income
• Gross monthly income: $8,333
• Max housing (28%): $2,333/month
• Max total debt (36%): $3,000/month
• Available for other debts: $667/month
Affordability by Income: Real Examples
Here's exactly how much house you can afford at different income levels, using the 28/36 rule:
$50,000 Income
Income Breakdown:
- Gross monthly income: $4,167
- Max housing (28%): $1,167/month
- Max total debt (36%): $1,500/month
Home Affordability:
With 20% Down:
- Home price: $175,000-$200,000
- Down payment: $35,000-$40,000
- Loan amount: $140,000-$160,000
- Monthly P&I: $885-$1,011 (at 6.5%)
- Add taxes/insurance: $200-300/month
- Total PITI: $1,085-$1,311/month
With FHA 3.5% Down:
- Home price: $150,000-$175,000
- Down payment: $5,250-$6,125
- Monthly payment: $1,100-$1,300 (with PMI)
$75,000 Income
Income Breakdown:
- Gross monthly income: $6,250
- Max housing (28%): $1,750/month
- Max total debt (36%): $2,250/month
Home Affordability:
Comfortable Budget:
- Home price: $275,000-$315,000
- 20% down: $55,000-$63,000
- Monthly PITI: $1,650-$1,900
$100,000 Income
Income Breakdown:
- Gross monthly income: $8,333
- Max housing (28%): $2,333/month
- Max total debt (36%): $3,000/month
Home Affordability:
Comfortable Budget:
- Home price: $375,000-$425,000
- 20% down: $75,000-$85,000
- Loan amount: $300,000-$340,000
- Monthly P&I: $1,896-$2,149 (at 6.5%)
- Total PITI: $2,200-$2,550/month
$150,000 Income
Income Breakdown:
- Gross monthly income: $12,500
- Max housing (28%): $3,500/month
- Max total debt (36%): $4,500/month
Home Affordability:
Comfortable Budget:
- Home price: $575,000-$650,000
- 20% down: $115,000-$130,000
- Monthly PITI: $3,300-$3,750/month
$200,000 Income
Income Breakdown:
- Gross monthly income: $16,667
- Max housing (28%): $4,667/month
- Max total debt (36%): $6,000/month
Home Affordability:
Comfortable Budget:
- Home price: $775,000-$875,000
- 20% down: $155,000-$175,000
- Monthly PITI: $4,400-$5,000/month
🎯 Get Your Exact Affordability Number
These are estimates. Get pre-approved to see your exact budget based on YOUR debts and credit:
Get Pre-Approved (Free in 3 Minutes)DTI Ratio: What Lenders Actually Use
While the 28/36 rule is conservative, lenders actually allow higher DTI ratios. Here's what each loan type accepts:
| Loan Type | Max DTI | What This Means |
|---|---|---|
| Conventional | 43-50% | Up to 50% of income on all debts |
| FHA | 50-57% | Most flexible (up to 57% with compensating factors) |
| VA | 41-50% | Residual income also considered |
| USDA | 41-43% | Stricter than FHA |
⚠️ WARNING: MAX DTI ≠ COMFORTABLE BUDGET
Just because lenders approve 50% DTI doesn't mean you should max it out!
Example: $100K income at 50% DTI
• Total debt allowed: $4,167/month
• After housing ($2,500): Only $1,667 for everything else
• Car payment: $500
• Student loans: $400
• Credit cards: $300
• Left over: $467/month for food, gas, utilities, savings, emergencies
This is TIGHT! Aim for 28-36% DTI for comfortable living.
How Down Payment Affects Affordability
Your down payment dramatically affects how much house you can afford. Here's the same $100K income with different down payments:
| Down Payment | Home Price | Cash Needed | Monthly Payment |
|---|---|---|---|
| 0% (VA/USDA) | $350K | $0 | $2,213 |
| 3.5% (FHA) | $360K | $12,600 | $2,350 (with PMI) |
| 10% | $380K | $38,000 | $2,400 (with PMI) |
| 20% | $425K | $85,000 | $2,500 (no PMI) |
💡 DOWN PAYMENT STRATEGY:
20% Down (Best Long-Term):
✅ No PMI (save $200-300/month)
✅ Lower rate (0.25-0.5% better)
✅ More home for same payment
❌ Need $80K-$100K saved
3.5-5% Down (Best for First-Time Buyers):
✅ Buy sooner (less savings needed)
✅ Build equity vs renting
✅ Combine with state grants
❌ PMI adds $150-250/month
❌ Higher rate
Strategy: Buy with 3.5-5% down, refinance to remove PMI when you hit 20% equity (2-5 years).
Hidden Costs That Reduce Affordability
Don't forget these hidden costs that reduce how much house you can actually afford:
- Property Taxes (0.5-2.5% of Home Value/Year)
$400K home in Texas (2% rate) = $8,000/year = $667/month. In California (0.7% rate) = $2,800/year = $233/month. Check your county's tax rate!
- Homeowners Insurance ($1,200-$3,000/Year)
Varies by location, home value, coverage. Florida/California = higher. Add $100-250/month to budget.
- HOA Fees ($100-$700/Month)
Condos/townhouses often have HOA. $300/month HOA = $54,000 less home you can afford (reduces monthly budget).
- PMI ($100-$300/Month if <20% Down)
FHA: 0.55-0.85% of loan amount. Conventional: 0.3-1.5% depending on credit. Adds $150-250/month typically.
- Maintenance & Repairs (1-2% of Home Value/Year)
$400K home = $4,000-$8,000/year = $333-667/month. Budget for: HVAC, roof, appliances, plumbing, landscaping.
- Utilities ($200-$500/Month)
Electric, gas, water, trash, internet. Bigger home = higher utilities. Budget $300-400/month average.
💰 TOTAL MONTHLY COST EXAMPLE ($400K HOME):
• Principal & Interest: $2,022
• Property Taxes: $500
• Insurance: $150
• HOA: $200
• PMI: $200
• Maintenance: $500
• Utilities: $350
Total: $3,922/month
Your mortgage payment is only $2,022, but your TOTAL housing cost is $3,922! This is why you need $115K+ income for $400K home.
Should You Max Out Your Budget?
NO! Just because you CAN afford $400K doesn't mean you SHOULD buy $400K. Here's why:
1. Emergency Fund
Need 3-6 months expenses saved. If you spend all savings on down payment, you're one job loss away from foreclosure.
2. Lifestyle Flexibility
Maxing out budget = no money for vacations, hobbies, dining out, kids' activities. You become house-poor.
3. Job Uncertainty
What if you lose job, get pay cut, or want to change careers? Maxed budget = no flexibility.
4. Future Goals
Kids, retirement, college savings, new car. Maxed budget = can't save for future.
✅ SMART STRATEGY:
Lender approves you for: $450K (50% DTI)
You should buy: $350-375K (30-35% DTI)
This gives you:
• $500-700/month cushion
• Emergency fund stays intact
• Can still save for retirement
• Lifestyle flexibility
• Sleep well at night
Rule of thumb: Buy 20-25% below your max approval amount.
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Frequently Asked Questions
How much income do I need for a $300K house?
Need $75K-$85K income. Calculation: $300K with 20% down = $240K loan at 6.5% = $1,517/month P&I. Add taxes ($300), insurance ($125), HOA ($100) = $2,042 total. Using 28% rule: $2,042 ÷ 0.28 = $7,293/month = $87,516/year. With FHA 3.5% down: Can qualify with $70K-$75K income.
What if I have student loans?
Student loans reduce affordability. Lenders count 0.5-1% of balance as monthly payment. Example: $50K student loans = $250-500/month for DTI. This reduces max housing by $250-500/month. Strategy: Get on income-driven repayment (IDR) to lower payment, or pay down balance before applying.
Does my credit score affect affordability?
Yes! Higher score = lower rate = more house. Example $100K income: 620 score at 7.5% = $350K max. 740 score at 6.5% = $425K max. That's $75K more house just from better credit! Improve credit before buying to maximize affordability.
Can I afford a house on one income?
Yes, but buy conservatively. Use 25% rule instead of 28% for safety. Example: $80K single income = max $1,667/month housing (25%) = $275K-$300K home. This protects you if you lose job or have medical emergency. Don't rely on future raises or bonuses.
What if I'm self-employed?
Lenders use 2-year average income. If income varies, they average last 2 years. Example: Year 1 = $80K, Year 2 = $120K. Average = $100K for qualification. Need 2 years tax returns showing consistent income. If income is declining, lenders use lower year.
📚 Related Affordability Guides
Meet David
Refinance & Rate Specialist
David Rodriguez is a seasoned refinancing expert with over 10 years of experience in mortgage rate analysis and market trend forecasting. As a Certified Rate Lock Specialist, he has saved homeowners millions in interest payments through strategic refinancing timing. His expertise in Federal Reserve policy impact and mortgage-backed securities makes him a go-to expert for rate predictions and refinancing strategies.
EXPERTISE:
KEY ACHIEVEMENT:
Saved clients $50M+ in interest payments