How much house can I afford? (2026 guide + calculator)

"How much house can I afford?" is the right first question — and almost nobody answers it before they start scrolling listings. The honest answer is not a single magic number. It is a range shaped by four things you control or can influence: your income, your existing debts, your down payment, and the interest rate you qualify for. Get those four right and the affordable price falls out of the math.

This guide walks through the rule lenders lean on, the levers that move your budget, and the gap between what a bank will approve and what you can comfortably live with.

The 28/36 rule, in plain English

Most lenders sanity-check affordability with two debt-to-income (DTI) ratios, summarized as the 28/36 rule:

• Front-end ratio (28%). Your total monthly housing cost should stay at or below 28% of your gross (pre-tax) monthly income. "Housing cost" means PITI — Principal, Interest, property Taxes and homeowners Insurance — plus any HOA dues.
• Back-end ratio (36%). All of your monthly debt payments combined — housing plus car loans, student loans, minimum credit-card payments and any other obligations — should stay at or below 36% of gross monthly income.

Some programs allow more. FHA loans, for example, can stretch the back-end ratio higher with strong compensating factors, and many conventional approvals run to 43–45%. But the 28/36 guardrail exists for a reason: it leaves room for the costs that do not show up on a loan application — utilities, maintenance, childcare, saving for the future.

A quick worked example

Say your household earns $90,000 a year, or $7,500 gross per month.

Limit	Formula	Monthly cap
Front-end (housing)	28% × $7,500	$2,100
Back-end (all debt)	36% × $7,500	$2,700
Room for other debt	$2,700 − $2,100	$600

If your car payment and minimum credit-card payments already total $600/month, you are at your back-end ceiling — so your housing budget gets squeezed below $2,100 to keep the total under $2,700. This is exactly why paying down a car loan before applying can raise your house budget more than a raise would.

Numbers are illustrative and rounded. Your lender uses your actual documented income and credit obligations.

From monthly payment to purchase price

A payment cap is not a price tag. To turn $2,100/month of housing budget into a home price, you have to peel off the parts that are not loan repayment, then back into the loan a payment can support.

• Property taxes and insurance often eat 15–25% of the PITI payment. On a $2,100 cap, perhaps $1,650 is left for principal and interest.
• The interest rate and term decide how big a loan that $1,650 services (more on this below).
• Your down payment adds to the loan to give the total price.

So price = loan you can finance + cash you bring. Two buyers with the same income can land at very different prices simply because one has saved more or qualifies for a lower rate.

The down payment lever

Forget the myth that you need 20% down to buy. You do not. Common minimums in 2026:

Loan type	Typical minimum down	Notes
Conventional	3%	PMI applies below 20% down
FHA	3.5%	Mortgage insurance required; flexible credit
VA (eligible service)	0%	No PMI; funding fee may apply
USDA (eligible rural)	0%	Income and area limits apply

What 20% does buy you is the ability to skip private mortgage insurance (PMI) on a conventional loan — an extra monthly cost that protects the lender, not you. A bigger down payment also shrinks the loan, which lowers both your monthly payment and the total interest you pay over the life of the mortgage.

The trade-off is real: putting more down increases the house you can afford but drains your cash cushion. Keep an emergency fund intact — a house you cannot maintain is not affordable.

What lenders actually look at

The 28/36 ratios are the headline, but an underwriter reviews a fuller picture before approving you:

• Gross income — stable, documented and verifiable (pay stubs, W-2s, tax returns; two years of history for self-employment).
• DTI — the front-end and back-end ratios above.
• Credit score and history — drives your interest rate and whether you qualify at all.
• Down payment and reserves — your cash to close, plus savings left over afterward.
• The property itself — the appraised value has to support the loan.
• Employment stability — a steady job history reassures the lender the income will continue.

Get a feel for your own back-end ratio first with the DTI calculator — it is the single number that most often surprises buyers and quietly caps their budget.

How rate and term change affordability

This is the lever buyers underestimate most. Because a mortgage is front-loaded with interest, the rate has an outsized effect on how much principal a fixed payment can support.

Consider a $1,650/month principal-and-interest budget on a 30-year fixed loan:

Interest rate	Approx. loan supported	vs. 5%
5.0%	~$307,000	—
6.0%	~$275,000	−$32,000
7.0%	~$248,000	−$59,000

Figures are approximate, for principal and interest only, and rounded for illustration. Use a calculator for your exact rate and term.

The rough rule of thumb: every one-point rise in the rate cuts your buying power by roughly 10%. That is why the same income buys a very different house depending on the rate climate — and why locking a rate and improving your credit score before applying both matter.

What about the term?

A 30-year loan has a lower monthly payment than a 15-year loan, so it lets you "afford" a higher price under the 28% test. But you pay far more interest over time. A 15-year loan builds equity faster and costs less in total, at the price of a higher monthly payment. Model both with the mortgage calculator to see the monthly-vs-lifetime trade-off side by side.

A simple step-by-step

1. Find your gross monthly income (annual ÷ 12).
2. Apply the 28% test for a housing-payment ceiling, and the 36% test for total debt.
3. Subtract existing monthly debts to find your true housing room.
4. Estimate taxes and insurance, leaving the principal-and-interest portion.
5. Use your expected rate and term to convert that into a loan amount.
6. Add your down payment to get a target purchase price.
7. Sanity-check against your take-home pay and lifestyle — not just the gross-income math.

The home affordability calculator does steps 2–6 for you in seconds.

Frequently asked questions

How much house can I afford on my salary?

Start with the 28/36 rule: housing under 28% of gross monthly income, total debt under 36%. On a $90,000 salary that is roughly $2,100/month for housing — but your down payment, rate, taxes and insurance set the actual price. Run your numbers in the calculator.

What is the 28/36 rule?

A lending guideline: keep your monthly housing cost (PITI plus HOA) at or below 28% of gross income, and all monthly debt payments combined at or below 36%. Some programs allow higher, but 28/36 keeps the payment comfortable.

How much down payment do I need?

There is no universal minimum — conventional loans go as low as 3%, FHA 3.5%, and some VA/USDA loans 0%. Twenty percent lets you avoid PMI but is not required. More down means a smaller loan and lower payments.

Does my credit score affect how much house I can afford?

Indirectly but significantly. It does not change the 28/36 limits, but it drives your interest rate — and a lower rate lets the same income support a bigger loan. Improving your score before applying can raise your affordable price.

How do interest rates change how much house I can afford?

A lot. For a fixed payment, a higher rate sends more money to interest, so you borrow less. Roughly every one-point rate rise cuts buying power by about 10%, which is why identical incomes buy different prices in different rate environments.