How Much House Can I Afford 2026?
Calculator + 28/36 Rule

Quick formula: Your annual salary × 4 = maximum home price (conservative). Examples: $80,000 salary = $320,000 home max. $100,000 = $400,000. $150,000 = $600,000. This assumes: 20% down payment, 6.5% interest rate, moderate property taxes/insurance, no other debt. More accurate: Use 28/36 rule - housing payment ≤28% of gross monthly income, total debt ≤36%. Example: $100K salary = $8,333/mo gross → $2,333 max housing payment → $416,000 home affordable.

The 28/36 rule is the gold standard for mortgage affordability: 28% RULE: Your total housing payment (mortgage + property tax + insurance + HOA + PMI) should not exceed 28% of your gross monthly income. 36% RULE: Your total monthly debt (housing + car loans + credit cards + student loans) should not exceed 36% of gross income. Example: $100K salary = $8,333/mo gross. Max housing: $8,333 × 28% = $2,333/mo. Max total debt: $8,333 × 36% = $3,000/mo. If you have $500/mo car payment, max housing = $2,500/mo.

You need $96,000-$120,000 annual income to afford a $400K house. Breakdown: $400K home with 20% down ($80K) = $320K loan. At 6.5% rate = $2,022/mo mortgage. Add property tax ($500/mo) + insurance ($150/mo) + HOA ($100/mo) = $2,772 total housing. Using 28% rule: $2,772 ÷ 0.28 = $9,900/mo gross income needed = $118,800/year. With 3.5% FHA down: Need $96,000/year (higher payment + PMI). With debt: Need $120,000+ (36% rule applies).

Total housing payment includes 5 components (PITI + HOA): 1) Principal & Interest (mortgage payment), 2) Property Taxes (0.5-2% of home value annually), 3) Homeowners Insurance ($1,000-$3,000/year), 4) HOA fees ($0-$500/month if applicable), 5) PMI (0.5-1% annually if down payment <20%). Example $400K home: Mortgage: $2,022/mo. Property tax: $500/mo. Insurance: $150/mo. HOA: $100/mo. PMI: $200/mo (if <20% down). TOTAL: $2,972/mo housing payment.

With $100K salary, you can afford $400,000-$450,000 home. Calculation: $100K salary = $8,333/mo gross income. Max housing (28% rule): $8,333 × 28% = $2,333/mo. At 6.5% rate with 20% down: $2,333/mo supports $416,000 home price. With 3.5% FHA down: $2,333/mo supports $380,000 home (higher payment due to PMI). With no other debt: Could stretch to $450,000 (use full 36% for housing). With $500/mo debt: Max $380,000 home (36% rule limits you).

Maximum DTI ratios by loan type: Conventional loans: 43% max (some lenders allow 45-50% with strong credit). FHA loans: 43% max (can go to 50% with compensating factors). VA loans: No official max, but most lenders cap at 41%. USDA loans: 41% max. Jumbo loans: 43% max (stricter requirements). BEST PRACTICE: Stay under 36% DTI for financial comfort. Example: $100K income = $8,333/mo gross. 43% DTI = $3,583 max total debt. 36% DTI = $3,000 max (recommended).

NO - use 80-90% of maximum for financial safety. Reasons: 1) Unexpected expenses (repairs, medical, job loss), 2) Lifestyle flexibility (vacations, hobbies, savings), 3) Rising costs (property taxes, insurance, utilities), 4) Future goals (kids, retirement, investments). Example: Qualify for $450K home but buy $360K-$400K instead. Save $500-$800/mo for: Emergency fund (6 months expenses), retirement (15% of income), home maintenance (1% of home value/year), fun money. You'll be happier with lower payment.

Larger down payment = afford more expensive home. Example $100K salary, $2,333/mo max payment: 3.5% FHA down: Afford $380,000 home (higher payment due to PMI $200/mo). 10% down: Afford $400,000 home (PMI $150/mo). 20% down: Afford $450,000 home (no PMI, lower rate). Each 5% down payment increase = ~$25K-$50K more home affordable. BEST STRATEGY: Save 20% down to avoid PMI and get best rate. If you can't wait, use 3.5-10% down + refinance later when you hit 20% equity.