How Much House Can I Afford? A Salary-by-Salary Guide
How much house you can afford comes down to your income, debts, and down payment — not just the sticker price. Here's a clear, salary-by-salary guide, the 28/36 rule, and the real costs most buyers forget.
When my wife and I started house hunting, we made the classic mistake: we looked at listings first and our budget second. We fell for a place, got pre-approved for a scary-big number, and almost stretched to the very top of it. Then a lender friend asked one blunt question — "What will the monthly payment actually feel like on a normal month, with the car payment and daycare?" That reframed everything. We bought well under our max, and I've never once regretted it.That's the real answer to "how much house can I afford": it's not the biggest number a bank will lend you — it's the payment you can live with comfortably. Let's break down exactly how to figure out your number, with real examples by salary, so you shop with a budget instead of a fantasy.
The Short Answer
A common rule of thumb is that you can afford a home priced around 3 to 5 times your annual gross income, depending on your down payment, debts, and interest rate. More precisely, lenders use the 28/36 rule: keep your housing payment under about 28% of your gross monthly income, and your total debt under about 36%. The bigger your down payment and the smaller your other debts, the more house that budget buys.
The 28/36 Rule (How Lenders Actually Decide)
Lenders don't look at the home price — they look at your monthly payment as a share of your income. Two numbers matter:
- Front-end ratio (28%): your total monthly housing payment — principal, interest, property taxes, and insurance (PITI) — should stay at or below about 28% of your gross monthly income.
- Back-end ratio (36%): all your monthly debt payments combined (housing + car loans + student loans + minimum credit card payments) should stay at or below about 36%.
So, on a $6,000/month gross income, you'd aim for a housing payment of around $1,680 (28%) and total debt payments no higher than about $2,160 (36%). Staying under these keeps you comfortable and helps you qualify.
How Much House Can I Afford by Salary
Here's roughly what different salaries can afford, assuming about a 20% down payment, a ~6.7% 30-year fixed rate (late 2026), modest other debts, and the 28% housing guideline. These are estimates to frame your search — your real number depends on your down payment, debts, credit, and local taxes:
| Annual salary | Rough affordable home price | Est. monthly payment (PITI) |
|---|---|---|
| $40,000 | $140,000–$165,000 | ~$930 |
| $50,000 | $175,000–$205,000 | ~$1,170 |
| $60,000 | $210,000–$250,000 | ~$1,400 |
| $70,000 | $245,000–$290,000 | ~$1,630 |
| $80,000 | $280,000–$330,000 | ~$1,870 |
| $100,000 | $350,000–$415,000 | ~$2,330 |
| $130,000 | $455,000–$540,000 | ~$3,030 |
| $150,000 | $525,000–$625,000 | ~$3,500 |
| $200,000 | $700,000–$830,000 | ~$4,670 |
Treat the range as a ceiling, not a target. Buying near the bottom of your range leaves breathing room for savings, emergencies, and the surprise costs of owning a home.
What Income Do You Need to Afford a $400,000 House?
Working backwards from the same assumptions (20% down, ~6.7% rate, 28% guideline), a $400,000 home has a monthly payment in the ballpark of $2,700 once taxes and insurance are included. To keep that at 28% of your gross income, you'd want an annual salary of roughly $115,000–$120,000. With a smaller down payment or higher local taxes, you'd need more; with less other debt and a bigger down payment, you could manage on somewhat less.
What Actually Changes Your Budget
The salary table is a starting point. Four things move your real number a lot:
- Down payment: a bigger down payment lowers the loan and the monthly payment, and can remove PMI at 20% — so it directly raises the price you can afford.
- Interest rate: even a half-point change noticeably shifts your payment. A lower rate buys more house for the same monthly budget.
- Existing debts: car loans, student loans, and credit card minimums eat into your 36% back-end ratio, shrinking what's left for a mortgage.
- Credit score: a higher score qualifies you for a lower rate, which lowers your payment. See what counts as a good credit score before you apply.
Don't Forget the Hidden Costs of Owning
The mortgage payment is only part of the picture. Budget for the extras that catch first-time buyers off guard:
- Property taxes and homeowners insurance (often bundled into your monthly payment via escrow)
- PMI if you put down less than 20%
- Closing costs — typically 2%–5% of the loan, due upfront
- Maintenance and repairs — a common guideline is about 1% of the home's value per year
- HOA dues, if applicable
A home you can "afford" on the mortgage alone can feel tight once these are added, which is why buying under your maximum is smart.
How to Afford More House (the Right Way)
If your target home is just out of reach, focus on the levers that genuinely help rather than simply borrowing more:
- Save a bigger down payment — the most direct way to raise your budget and cut the payment.
- Pay down other debts — clearing a car loan frees up room in your 36% ratio.
- Raise your credit score — a better rate lowers the payment for the same price.
- Shop your mortgage rate — comparing lenders can shave your rate and monthly cost.
Run Your Own Numbers
The table gives you a frame, but your real budget depends on your exact rate, down payment, taxes, and debts.
Use our Mortgage Calculator to test a home price and see the monthly payment, then check it against the 28% guideline for your income. It's the fastest way to turn "how much house can I afford" into a number you can shop with.
Frequently Asked Questions
- How much house can I afford on my salary?
- A common guideline is a home priced at about 3 to 5 times your gross annual income, with your monthly housing payment kept under about 28% of your gross monthly income (the 28/36 rule). For example, a $60,000 salary supports roughly a $210,000–$250,000 home with 20% down at current rates, while $100,000 supports around $350,000–$415,000. Your down payment, debts, and rate move the number.
- What income do you need to afford a $400,000 house?
- With about 20% down and a ~6.7% 30-year rate, a $400,000 home runs roughly $2,700 a month, including taxes and insurance. To keep that near 28% of your gross income, you'd want an annual salary of about $115,000–$120,000. A larger down payment or lower debts can reduce the income needed.
- Can I afford a $300K house on a $60K salary?
- It's possible but tight. A $300,000 home with 20% down at current rates costs around $1,900–$2,000 a month with taxes and insurance, which is roughly 38%–40% of a $60,000 gross income — above the 28% guideline. It becomes realistic with a larger down payment, minimal other debt, or in a low-property-tax area
- What is the 28/36 rule for buying a house?
- The 28/36 rule says your monthly housing payment (principal, interest, taxes, insurance) should stay at or below about 28% of your gross monthly income, and your total monthly debt payments should stay at or below about 36%. Lenders use these ratios to decide how much mortgage you qualify for.
- How much house can I afford making $100,000 a year?
- On a $100,000 salary with about 20% down and current rates, you can typically afford a home priced around $350,000–$415,000, with a monthly payment near $2,300. Less existing debt and a larger down payment push you toward the higher end; more debt pushes you lower.
- How many times my salary should my house be?
- A widely used rule of thumb is 3 to 5 times your gross annual income. Three times is conservative and comfortable; five times is aggressive and usually only works with a large down payment, low other debts, and a stable income. Where you land depends on rates and your full financial picture.
- What is the 3-3-3 rule for home buying?
- The 3-3-3 rule is an informal guideline suggesting you spend no more than 3 times your annual income on the home, have at least 3 months of expenses saved after the down payment, and put down at least a meaningful amount up front. It's a conservative cushion, not a lending requirement.
- Does my down payment change how much house I can afford?
- Yes, significantly. A larger down payment reduces your loan amount and monthly payment, can eliminate PMI at 20% down, and therefore raises the home price you can afford on the same income. It's one of the most direct ways to increase your budget.
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