How Much House Can I Afford
Find out how much home you can afford based on your income, debts, and down payment using the 28/36 rule lenders apply.
Monthly Payment Breakdown
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How the Affordability Calculator Works
This calculator uses the 28/36 rule that most lenders follow when qualifying borrowers. The front-end ratio caps your housing costs at 28% of gross monthly income. The back-end ratio limits total debt payments — housing plus car loans, student loans, and credit cards — to 36% of gross income. The calculator takes the lower of these two limits and works backward to find your maximum home price.
What Counts as Monthly Debt
Include minimum payments on credit cards, car loans, student loans, personal loans, and any other recurring monthly obligations that show up on your credit report. Do not include utilities, groceries, subscriptions, or insurance premiums — lenders only count debts reported to credit bureaus. If you are unsure about your total debt payments, pull your credit report and add up the minimum payments listed.
Down Payment and Its Impact
A larger down payment increases your buying power because it reduces the loan amount and the resulting monthly payment. With 20% down, you also avoid private mortgage insurance (PMI), which typically costs 0.5-1% of the loan annually. Putting down less than 20% is common — FHA loans require just 3.5% — but your maximum affordable price drops because PMI adds to your monthly housing cost. Use our mortgage calculator to see how different down payments change your monthly payment.
Interest Rate Matters More Than You Think
A 1% difference in interest rate can change your maximum home price by $30,000-$50,000 depending on your income. Rates vary by lender, credit score, and loan type. Check current mortgage rates before running this calculator to get the most accurate result. If you plan to buy in a few months, use a slightly higher rate as a buffer.
Property Taxes and Insurance
Property taxes vary dramatically by state — from under 0.5% in Hawaii to over 2% in New Jersey and Texas. This calculator defaults to 1.2%, which is close to the national average. Enter your actual state or county rate for a more accurate result. Home insurance costs depend on location, coverage amount, and property type. Coastal areas and regions prone to natural disasters will have higher premiums. See our closing costs guide for a full breakdown of what you will pay at the closing table.
Next Steps After Using This Calculator
Once you know your budget, get pre-approved with a lender to confirm the number. Pre-approval involves a credit check and income verification that gives you a firm borrowing limit. Then start looking at homes within your price range — not at the top of it. Leaving room in your budget for maintenance, savings, and unexpected costs is how you avoid becoming house-poor. Read our complete home buying guide for step-by-step instructions on going from calculator to keys.
Frequently Asked Questions
How much income do I need to buy a $400,000 house?
You’ll generally need a household income of at least $95,000-$110,000 to afford a $400,000 home, assuming a 10% down payment, 7% interest rate, and reasonable property taxes. This keeps your housing costs within the recommended 28% of gross income. Higher down payments or lower interest rates reduce the income you need, while high property tax states like New Jersey or Texas push the number up.
What is the 28/36 rule for buying a house?
The 28/36 rule is a lending guideline that says your mortgage payment shouldn’t exceed 28% of your gross monthly income, and your total debt payments (mortgage plus car loans, student loans, credit cards) shouldn’t exceed 36%. On a $6,000 monthly gross income, that means a max housing payment of $1,680 and total debts of $2,160. Some loan programs like FHA allow higher ratios, up to 31/43, but staying within 28/36 gives you a comfortable cushion.
How much should I save before buying a house?
Plan to save 8-12% of the purchase price at minimum. On a $350,000 home, that’s $28,000-$42,000 to cover a 3.5-5% down payment plus 2-5% in closing costs plus a 3-month emergency fund. Putting down 20% ($70,000 on that same house) eliminates PMI and lowers your monthly payment by $150-$250. Don’t forget moving costs, immediate repairs, and furniture — budget an extra $5,000-$10,000 for those.
Does my credit score affect how much house I can afford?
Yes, significantly. A buyer with a 760+ credit score might get a 6.5% rate, while someone at 620 could pay 8% or higher. On a $300,000 loan, that 1.5% difference means roughly $300 more per month and over $100,000 more in total interest. A higher credit score also means lower PMI rates and better loan options. Boosting your score by even 40 points before buying can save you tens of thousands of dollars.
Can I afford a house if I have student loans?
You can, but student loans reduce your borrowing power because lenders count them in your debt-to-income ratio. A $400/month student loan payment on a $6,000 monthly income eats up 6.7% of your DTI, leaving less room for a mortgage. Income-driven repayment plans with lower monthly payments help. FHA loans are more flexible with student debt, and some programs offer down payment assistance for borrowers with student loans.
What are the hidden costs of homeownership?
Beyond the mortgage, expect to spend 1-2% of your home’s value per year on maintenance ($3,500-$7,000 on a $350,000 home). Property taxes average 1.1% nationally but range from 0.3% in Hawaii to 2.2% in New Jersey. Homeowners insurance runs $1,500-$3,000 per year. HOA fees, if applicable, add $200-$400 monthly. Utilities typically cost $200-$400 more than renting. Factor these into your budget before deciding what you can afford.