Short answer: Most buyers can afford a home whose total monthly payment, including property tax and insurance, is no more than 28% of gross monthly income, with all debts staying under 36%. On a $100,000 salary with $500 of other debt, $40,000 down and a 7.32% rate, that's a home of roughly $322,000.
What different incomes can afford
Using the comfortable 28/36 rule, $40,000 down, no other debts, a 7.32% 30-year rate, 1% property tax and $1,500 a year of insurance:
| Annual income | Max monthly housing payment | Affordable home price |
|---|
| $60,000 | $1,400 | about $201,000 |
| $80,000 | $1,867 | about $262,000 |
| $100,000 | $2,333 | about $322,000 |
| $150,000 | $3,500 | about $474,000 |
Rate: Freddie Mac Primary Mortgage Market Survey, 30-year fixed average of 7.32% for the week of October 22, 2026. Your quoted rate will depend on credit, down payment and lender.
How the calculation works
Lenders cap two ratios. The front-end ratio limits your housing payment as a share of gross income; the back-end ratio limits housing plus every other debt. The calculator takes whichever limit is lower as your maximum monthly payment.
From that payment it subtracts property tax, insurance and HOA dues, and turns what's left into a loan amount using the standard mortgage formula. Add your down payment and you have the price. Because property tax depends on the price itself, the calculator solves for both at once.
Your debts matter more than most people expect: every $100 of monthly car or card payments can cut the price you can afford by roughly $13,000 once you're limited by the back-end ratio at today's rates. Check where you stand with the debt-to-income calculator.
Ways to afford more house
Pay off a small debt before you apply. Removing a whole monthly payment frees room under the 36% limit.
Shop the rate. One percentage point is worth about $27,000 of buying power in the $100,000-income example.
Put down 20% if you can. It avoids PMI on a conventional loan, which this calculator doesn't include.
Look at property tax before the listing price. The same payment buys noticeably less house in a high-tax county.
Frequently asked questions
How much house can I afford on a $100,000 salary?
With $500 a month in other debts, a $40,000 down payment and a 7.32% 30-year rate, roughly $322,000 under the 28/36 rule, assuming 1% property tax and $1,500 a year of insurance. Lower debts, a bigger down payment or a lower rate all raise that number.
What is the 28/36 rule?
A guideline lenders and planners use: spend no more than 28% of gross monthly income on housing (mortgage, property tax, insurance and HOA) and no more than 36% on all debts combined. Many loans allow more, but staying inside it keeps the payment comfortable.
How much does the interest rate change what I can afford?
A lot. In the example above, a rate one point lower (6.32% instead of 7.32%) raises the affordable price by about $27,000 with the same payment. That's why it pays to compare lenders and improve your credit before you shop.
Does this include PMI?
No. With less than 20% down, a conventional loan usually adds private mortgage insurance, which lowers the price you can afford for the same payment. Treat the result as an upper estimate if you're putting less than 20% down.
Should I buy the most house a lender approves?
Usually not. Lenders look at gross income and can approve up to about 50% DTI. Your real budget runs on take-home pay and has to cover repairs, savings and everything else. The comfortable setting here is a better target than the maximum.
Disclaimer: Estimates for planning only, not lending or financial advice. Excludes PMI, closing costs and maintenance. Lenders set their own limits.