How much house can I afford?
The most widely used guideline is the 28/36 rule: your housing payment should not exceed 28% of gross monthly income, and your total debt (housing plus car, student loans, and credit card minimums) should not exceed 36%.
This calculator shows you two numbers: the maximum you could technically qualify for at 36% DTI, and a more conservative comfortable price at 28% of gross income. Most financial advisors recommend targeting the lower number — lenders will often approve you for more than you can comfortably afford.
Factors that affect how much you can borrow
- Gross income — lenders use pre-tax income to calculate DTI
- Existing debts — every $100/month in debt payments reduces borrowing power by roughly $15,000–$18,000
- Credit score — a 760+ score typically gets the best rates; below 680 significantly increases your rate
- Down payment — 20% eliminates PMI and reduces the loan amount
- Interest rate — a 1% rate difference on a $300,000 loan changes your payment by roughly $175/month
Frequently asked questions
How much house can I afford on $80,000 a year?
On $80,000/year ($6,667/month gross), the 28% rule gives a maximum housing payment of $1,867/month. At 6.75% for 30 years with a 10% down payment, that affords a home price of roughly $270,000–$290,000.
What is the 28/36 rule?
The 28/36 rule says spend no more than 28% of gross monthly income on housing and no more than 36% on total debt. Most conventional lenders use the 36% total DTI as the qualifying limit.
What is DTI and why does it matter?
DTI (debt-to-income ratio) is total monthly debt divided by gross monthly income. Most lenders want DTI at 43% or below. FHA loans may allow up to 50%.