How Much House Can You Really Afford?
Buying a home is likely the biggest financial decision you'll ever make — and getting the number wrong hurts for decades. This calculator uses the same 28/36 rule that mortgage lenders rely on, so the estimate you see here closely mirrors what a bank will actually approve.
Instead of guessing, you enter four things: your gross annual income, your monthly debt payments, your planned down payment, and the current interest rate. In return, you get a realistic price range you can shop within — before you fall in love with a house that quietly wrecks your budget.
The 28/36 Rule, Explained in Plain English
Lenders don't want you drowning in payments, so they cap two ratios:
- 28% (Front-end ratio): No more than 28% of your gross monthly income should go to housing — that's principal, interest, property taxes, and insurance (PITI).
- 36% (Back-end ratio): No more than 36% of your income should go to all debt combined — housing plus car loans, student loans, and credit cards.
A real example: Say you earn $90,000 a year — that's $7,500 gross per month. The 28% rule caps your housing payment at $2,100. If you also pay $500/month in car and student loans, the 36% rule caps total debt at $2,700, leaving $2,200 for housing. Your true ceiling is the lower of the two: $2,100/month.
Why Your Down Payment Changes Everything
A bigger down payment does three things at once: it shrinks your loan, lowers your monthly payment, and can eliminate PMI (Private Mortgage Insurance) once you cross 20% down. PMI often adds $100–$250 to your monthly bill for nothing you'll ever get back.
On a $350,000 home, putting down 20% ($70,000) instead of 10% ($35,000) can save you roughly $150/month in PMI plus lower interest — often more than $30,000 over the life of the loan.
What Most Affordability Calculators Get Wrong
Many free tools only look at income and ignore your existing debt, property taxes, and insurance. That's how buyers end up "approved" for homes they can't comfortably afford. This calculator factors all of it, so the number you see is one you can actually trust when you walk into a lender's office.
Tips to Afford More Home
- Increase your down payment to reduce the loan amount.
- Pay down existing debts to improve your debt-to-income ratio.
- Improve your credit score to qualify for lower interest rates.
- Consider a longer loan term to lower monthly payments.
Frequently Asked Questions
How much house can I afford on a $90,000 salary?
With a $90,000 income, moderate debts, and a healthy down payment, many buyers can afford a home in the $300,000–$400,000 range, depending on interest rates. Use the calculator above for your exact estimate.
Should I spend the maximum a lender approves?
No. Lenders approve the maximum you can technically pay — not the amount that leaves room for savings and emergencies. Many advisors suggest keeping housing under 25% of take-home pay.
Does my down payment affect how much I can afford?
Yes. A larger down payment increases your maximum home price because it reduces the loan amount you need to finance.
Does my credit score affect how much I can afford?
Yes. A higher score gets you a lower rate, which directly increases your buying power. A 1% rate difference can shift your budget by tens of thousands of dollars.