How Much House Can You Afford in 2026?
Before you start house hunting, you need a hard number: the price you can actually afford, not the price a lender is willing to lend. Our home affordability calculator uses the same 28/36 debt-to-income (DTI) rule that mortgage underwriters across the United States rely on. Plug in your annual income, monthly debts, down payment, interest rate, loan term, and local property tax rate, and the calculator returns your maximum home price, maximum loan amount, recommended monthly payment, and both DTI ratios. This is the single most useful number in your entire home-buying plan.
Home Affordability Calculator
Based on the CFPB 28/36 DTI rule used by most lenders. Enter your details below.
PMI and homeowner's insurance here are estimates (PMI ≈ 0.5% of loan; insurance ≈ 0.35% of home price). For exact PMI by LTV and credit, use our PMI calculator.
Your Home Affordability Results
| Metric | Value |
|---|---|
| Maximum Home Price | |
| Maximum Loan Amount | |
| Recommended Monthly Payment | |
| Front-End DTI Ratio | |
| Back-End DTI Ratio |
Understanding the 28/36 DTI Rule Used by Lenders
The foundation of every mortgage approval is your debt-to-income ratio. Conservative lenders follow the "28/36 rule": your monthly housing costs (principal, interest, property taxes, homeowners insurance, and HOA dues) should not exceed 28% of your gross monthly income, and your total monthly debt payments (housing plus credit cards, auto loans, student loans, and other debts) should not exceed 36%. FHA loans are more flexible, allowing housing costs up to 31% and total debt up to 43% in certain cases. Our calculator applies the stricter conventional limits but shows both your front-end (housing-only) and back-end (all-debt) ratios so you can see where you stand.
How the Affordability Calculator Works
The math is straightforward. First, the calculator finds your maximum allowable monthly housing payment using the lower of the 28% housing limit and the 36% total-debt limit minus your other debts. Then it converts that monthly payment into a maximum loan amount using the standard loan-payment formula, and adds your down payment to get the maximum home price. Finally, it layers in property tax and insurance to show your realistic all-in monthly payment (PITI).
The Core Formula
Max Loan = Monthly Housing Payment × [ (1 − (1 + r)−n) ÷ r ]
Where r = monthly interest rate (annual ÷ 12) and n = number of payments (years × 12). Maximum home price = max loan + down payment.
Example: a household earning $100,000 per year ($8,333/month) with $500 in other debts and a $20,000 down payment at 6.5% on a 30-year loan can typically afford a home near $360,000–$380,000, with a monthly PITI payment around $2,300–$2,500. Your own numbers will shift with rate, tax rate, and down payment.
Why Your Down Payment Matters More Than You Think
A larger down payment does two things at once. First, it shrinks the loan you need, which directly lowers your monthly principal and interest. Second, crossing the 20% threshold eliminates private mortgage insurance (PMI), which can remove $100–$400 or more from your monthly payment. Even moving from 5% to 10% down often improves your rate and your approved price. If you are still building your down payment, our down payment planner shows a monthly savings path to your goal.
Factors That Change Your Affordable Price
- Interest rate: Each 0.5% rate change moves your buying power by roughly 5–6%. A drop from 7.0% to 6.0% can add $25,000–$30,000 to your max price.
- Property tax rate: Taxes range from under 0.3% in Hawaii to over 2.2% in New Jersey. Use our state guides for your real local rate.
- Other debts: A car payment or large student loan directly reduces the price you can afford because it eats into the 36% back-end limit.
- Loan term: A 15-year loan has higher monthly payments, so it lowers the price you qualify for, but saves enormous interest.
Common Mistakes When Estimating Affordability
Using the loan pre-approval as your budget
Lenders approve the maximum you can barely afford, not what leaves room for life. Treat the calculator's number as a ceiling and set your own comfortable floor.
Forgetting taxes, insurance, and PMI
PITI is the real payment. Ignoring tax and insurance can understate your monthly cost by $300–$800.
Ignoring HOA and maintenance
Condos and planned communities add HOA dues; every home needs a repair budget of about 1% of value per year.
Front-End vs Back-End DTI
The calculator reports both ratios because lenders weigh them differently. The front-end DTI is housing cost divided by income; the back-end DTI adds all your debts. A strong application keeps the back-end near or below 36% for conventional loans. If yours is higher, paying down a car loan or credit card before applying can unlock a larger approved price.
How Lenders Verify Your Income and Debts
Your calculator estimate is only as good as your inputs, but a real approval goes further. Lenders verify income with pay stubs, W-2s, and two years of tax returns for salaried borrowers—or 1099s and business returns for the self-employed. They pull your credit report to confirm every monthly debt: auto loans, student loans, credit cards, and any co-signed obligations. They also count proposed housing costs including taxes, insurance, and HOA dues. Knowing this up front helps you enter realistic numbers and avoid surprises at underwriting. If your income is variable, use a conservative average so the calculator reflects what a lender is likely to accept.
Credit Score and the Rate You Get
Your credit score strongly influences the interest rate, which in turn drives your affordable price. Conventional loans generally require a 620 minimum, but the best rates land at 740 and above; dropping from 740 to 620 can add 0.5%–0.75% to your rate, shrinking your buying power by tens of thousands of dollars. FHA loans accept scores as low as 500 with 10% down or 580 with 3.5% down, though the rate still rises with risk. Before house hunting, pull your reports, fix errors, and pay down balances—even a 20–40 point bump can change the price you qualify for. Run the numbers at a few rate scenarios in the calculator to see the sensitivity.
Conventional, FHA, VA, and USDA Loan Limits
The loan program changes both your minimum down payment and your approved amount. Conventional loans follow Fannie Mae and Freddie Mac rules, often needing 3%–5% down for first-time buyers and private mortgage insurance below 20% equity. FHA loans allow 3.5% down at 580+ and are more forgiving of credit blemishes. VA loans for eligible veterans and USDA loans for rural buyers can require no down payment at all, which dramatically increases the price you can afford for the same monthly payment. Each program also caps loan sizes by county. Because the calculator assumes a standard fixed loan, compare program-specific payment estimates with a loan officer before committing.
Affordability vs Comfort: Setting Your Own Floor
The 28/36 rule tells you the maximum a lender will allow, not the payment you should carry. Many financially secure households choose a lower price so they can keep saving, travel, and handle emergencies. A useful exercise is to subtract your true non-housing goals—retirement contributions, childcare, hobbies—from your income first, then see what housing payment remains. Treat the calculator's output as a ceiling and set your own comfortable floor beneath it. The home you can technically afford and the home you can comfortably afford are often different numbers, and the second is usually the smarter one to buy.
Property Taxes and Insurance Vary Widely
Two households with identical incomes can afford very different prices purely because of location. Property tax rates span from under 0.3% in Hawaii to more than 2.2% in New Jersey, and homeowner's insurance ranges from about $1,200 in low-risk inland areas to $2,500+ in coastal or storm-prone regions. Over a $400,000 home, that tax difference alone is $800 to $7,000 per year—$67 to $580 per month—directly reducing what you can pay toward the loan. Use the real rate from your state guide so the calculator reflects your market rather than a national average.
Pre-Approval vs Pre-Qualification
A pre-qualification is a rough estimate based on what you self-report; a pre-approval is a verified commitment backed by documented income, credit, and assets, and it carries real weight with sellers. Get pre-approved before serious shopping so your calculator-based price range is confirmed by a lender and your offers stand out in competitive markets. The calculator is the planning tool; the pre-approval is the proof.
Should You Wait to Save a Bigger Down Payment?
Waiting to reach 20% down avoids PMI and lowers the rate, but it also means more time renting while prices and rents rise. In fast-appreciating markets, buying sooner with 5%–10% down and capturing appreciation often beats the slow save, especially when you can refinance or drop PMI later. Run both scenarios in the calculator and weigh the monthly difference against your local price growth and how long you expect to stay.
Frequently Asked Questions
How much house can I afford on a $100,000 salary?
At 28/36 with no other debt and a 6.5% rate, roughly a $360,000–$380,000 home with a $20,000 down payment. Run your exact numbers above—your tax rate and debts change the result.
Is the 28/36 rule mandatory?
It is the conventional benchmark. FHA allows up to 31/43, and some portfolio lenders go higher with strong credit and reserves, but 28/36 keeps the most breathing room.
Should I spend the full amount I qualify for?
Usually no. The approved maximum is a ceiling. Many buyers choose a lower price to keep payments comfortable and preserve savings.
How do I raise my affordable price?
Lower other debts, increase your down payment, improve your credit for a better rate, or choose a lower-tax area—see our state guides for tax comparisons.
The calculator gives you a defensible starting number, but pair it with a lender pre-approval and a realistic view of your other goals before you commit to a price. A figure on a screen is a plan; a payment you can comfortably make every month is a home. Revisit the numbers whenever your income, debts, or rates change so your target stays honest.
Related Calculators
Once you know your price range, sharpen the details with our monthly payment calculator, check your DTI ratio, model a down payment & PMI scenario, or compare locations with the state comparison calculator. If rates drop, the refinance savings calculator shows when moving your loan pays off.