"How much house can I afford?" is the first question every buyer asks — and getting it wrong is stressful and expensive. The good news: lenders use one simple rule, and you can estimate your number in seconds.
The 28/36 rule
Lenders look at two ratios:
- 28% rule: your monthly housing payment shouldn't exceed 28% of your gross monthly income.
- 36% rule: your total debt (housing + car + cards + loans) shouldn't exceed 36%.
Roughly how much house by salary
Assuming about 20% down, a ~6.5% rate and minimal other debt, here's a ballpark of the home price you could target:
| Annual salary | Estimated home price |
|---|---|
| $50,000 | ~$210,000 |
| $75,000 | ~$310,000 |
| $100,000 | ~$420,000 |
| $150,000 | ~$630,000 |
These are rough estimates — your real number depends on your debts, down payment, rate and local taxes.
What else moves your budget
- Down payment: more down = bigger budget and no PMI at 20%.
- Interest rate: even 0.5% changes what you can borrow.
- Other debts: car and card payments shrink your housing budget.
- Taxes & insurance: these ride on top of principal & interest.
Frequently asked questions
What salary do I need for a $300k house?
Roughly $70,000–$80,000 a year with about 20% down and low other debt — but it varies with your rate, taxes and existing debts.
Should I borrow the maximum I qualify for?
No. Qualifying for it doesn't mean it's comfortable. Leave room for savings, emergencies and life.
Does this include property tax and insurance?
Those sit on top of principal & interest, so budget extra. The affordability calculator helps you account for them.
