How much house can I afford?
By David Chen · Published September 26, 2026
Ask that question of a search engine and you will get a single confident number. Ask it properly and there are three, all defensible, all different — and knowing which one you are looking at is most of the work. This guide sets out where each comes from and which to build a budget on.
Three numbers, three questions
- What a lender will approve. Derived from gross-income ratios and a default-risk model. It answers: how much will someone lend me?
- What a ratio supports. The 28/36 convention applied to your income and existing debts. It answers: what does the standard budgeting rule allow?
- What you can carry. The payment you can make for thirty years while still saving, covering the property and absorbing a bad year. It answers: what should I actually spend?
The three are frequently quoted interchangeably, which is how people end up surprised. A household can easily qualify for a house it cannot comfortably own, and the gap is not small.
What the ratio actually measures
Underwriting runs on two ratios. The front-end ratio caps housing cost as a share of gross monthly income. The back-end ratio caps all debt — housing plus car loans, student loans and minimum card payments — as a share of the same figure. Take a household earning $100,000 with $500 of monthly debts and $60,000 in cash, borrowing at 6.50% over 30 years:
| Ratio applied | Affordable price | Monthly housing cost | Housing share of gross income |
|---|---|---|---|
| 28% housing / 36% total debt | $334,427 | $2,333.33 | 28.0% |
| 36% housing / 43% total debt | $420,589 | $3,000.00 | 36.0% |
1.2% property tax, $1,800 insurance a year, mortgage insurance at 0.5%. Produced by our calculator and independently recomputed.
Nothing about the household changes between those two rows — the income, the debts and the savings are identical. Only the ceiling moves, and it moves the price by $86,162. That is the first reason to be suspicious of any single answer to the question in this page's title: the number is a function of a rule as much as of your finances.
The payment is not the loan payment
The second reason is what the monthly figure has to cover. On the conservative case above, the $2,333.33 monthly housing cost breaks down like this:
| Component | Per month |
|---|---|
| Principal and interest | $1,734.56 |
| Property tax | $334.43 |
| Home insurance | $150.00 |
| Mortgage insurance | $114.34 |
| HOA fee | $0.00 |
Property tax and insurance are inputs you supply, not national averages — they vary substantially by location.
Loan repayment is under three-quarters of the bill. The rest is the ongoing cost of owning the property, and two of those lines scale with the price rather than the loan — which means the true cost of a more expensive house rises faster than the extra borrowing alone implies.
Costs no affordability calculator includes
Every calculator on this site models the monthly payment. None of them can model the cash you need on the day you buy or the bills that arrive afterwards, because those depend on your situation. They are still part of affordability:
- Closing costs. Commonly 2% to 5% of the purchase price — on a $334,400 home that is roughly $6,700 to $16,700, paid in cash alongside the down payment.
- Maintenance. A widely used planning figure is about 1% of property value a year. On this house that is roughly $3,300 annually, or $275 a month, and it does not arrive evenly — it arrives as a roof.
- A reserve. Three to six months of expenses held back is the ordinary guidance. In the first year of ownership, with unfamiliar systems and no landlord, it is closer to essential.
- Moving and setup. Moving costs, deposits, blinds, appliances, a mattress. Routinely several thousand dollars and routinely forgotten.
A household that has spent every dollar on the down payment and has nothing left for these has not bought an affordable house, whatever the ratio said.
The down payment has a threshold, not a slope
Down payments are usually discussed as a percentage dial. They behave more like a step. Holding the income at $100,000, the debts at $500 and the rate at 6.50%, and changing only the cash available:
| Down payment | As % of price | Mortgage insurance | Affordable price |
|---|---|---|---|
| $40,000 | 12.6% | Yes | $317,011 |
| $60,000 | 17.9% | Yes | $334,427 |
| $80,000 | 21.8% | No | $367,314 |
| $100,000 | 26.0% | No | $384,582 |
28/36 limits throughout, with term, rate, tax rate and insurance held constant.
From $60,000 to $80,000 — $20,000 more cash — the affordable price rises by $32,887. From $40,000 to $60,000, the same $20,000 buys only $17,416 of extra house. The difference is the third column: below 20% down, mortgage insurance consumes part of the debt-to-income allowance, and crossing the threshold releases it. The affordability calculator shows this on your own figures.
Gross income is not the money you have
Both ratios are computed on gross income, before tax is deducted. The payment, however, comes out of what actually reaches your account. This is why a ratio that reads as comfortable on paper can feel tight in practice, and why the same percentage means different things to two households with different tax positions and different fixed costs.
A defensible way to set your own ceiling
Rather than starting from what you can borrow, start from what you are willing to pay, then find the price that fits:
- Write down the monthly figure you would be comfortable with for the next five years — not the maximum you could survive this year. Assume it stays fixed while everything else rises.
- Check it against take-home pay, not gross. If it exceeds about a quarter of net income, be cautious even if a lender is willing.
- Subtract the non-loan costs from that figure first — property tax, insurance, HOA and any mortgage insurance. What remains is what you can devote to principal and interest.
- Fund the reserve and the closing costs before touching the down payment. They are not optional and they are not financed.
- Then translate back to a price using the affordability calculator, and check the resulting loan in the amortization schedule so you have seen the full term rather than just the first payment.
That sequence usually produces a number below what a lender would approve. That is the intended outcome, not a sign you have done it wrong.
The short version
“How much house can I afford” has three answers: what a lender will approve, what a ratio supports, and what you can carry for thirty years while still saving. Only the third is a budget. The first is a risk threshold, and the second is a convention — both useful, and neither a substitute for deciding what you want to spend, subtracting the costs no calculator can see, and working backwards from there. On the example used throughout this guide, the difference between the conservative and wider ceilings alone is $86,162, which is a good measure of how much the answer depends on the rule rather than on you.
Frequently asked questions
What is a safe debt-to-income ratio for a mortgage?
There is no universally safe number, because the ratio is calculated on gross income while the payment is made from net income. The 28/36 convention is the conservative end and is a reasonable ceiling to plan against. The wider 36/43 limits that many loans are underwritten to describe what a lender will approve, not what a household should commit — and a household with childcare, student debt or irregular income is exposed at ratios well below either figure.
Should I borrow the maximum the lender approves?
Usually not. The maximum is set by a default-risk model applied to a gross-income ratio, and it is silent about your savings rate, your job security, your commute, your childcare costs and whether you want to retire before the loan ends. The approved figure is best read as the point past which a lender stops, not the point up to which you should go. Buying below it deliberately is the single most common piece of advice from people who have owned for decades.
Why is my affordable price lower than what the bank says?
Because the two numbers answer different questions. The bank applies one ratio to gross income. A fuller calculation also subtracts the closing costs, the maintenance the property will need, the reserve you should keep and the possibility that your income falls. In the worked example on this page a ratio-based ceiling comes out around $334,400, while a household that wants a twelve-month reserve and expects $3,000 a year of maintenance lands well below it.
How much cash do I need beyond the down payment?
Plan for closing costs of roughly 2% to 5% of the purchase price, paid at closing alongside the down payment, plus moving and immediate setup costs, plus a reserve of three to six months of expenses. On a $334,400 purchase, closing costs alone could be $6,700 to $16,700. Spending every available dollar on the down payment is a common mistake precisely because the down payment is the number everyone plans for.
Does the 28/36 rule still apply in 2026?
It remains the conventional reference point, but underwriting practice has shifted and many loans are approved against 36/43 or wider. That makes the rule less useful as a prediction of what you will be offered and more useful as a budgeting standard you choose deliberately — which is arguably what it always was.
Related guides
- 15-year vs 30-year mortgage — The same loan on both terms, side by side: what the shorter term saves, what it costs each month, and the affordability test that decides it.
- How to compare loan offers — Why the headline rate is not the comparison, the three numbers that are, and how to work out whether discount points are worth paying.
- Biweekly payments: what they really save — How paying half your mortgage every two weeks works, the exact saving on a worked loan, and the fees and pitfalls to avoid first.
- Refinance break-even point — How to work out the month a refinance pays for itself, why a shorter term can raise your payment and still save six figures, and when not to refinance.
Run your own numbers in the loan calculator.
Calculators for this topic
- Home affordability calculator — Works the mortgage question backwards: start from your income, debts and down payment, and find the price you can actually carry rather than the price a lender will approve.
- Mortgage calculator — Monthly payment with property tax, home insurance, HOA and PMI folded in — the number that actually leaves your account, not just principal and interest.
- Amortization schedule — The full month-by-month and year-by-year breakdown of a fixed-rate loan, and how much interest an extra payment removes from the end of it.
This guide is educational and is not financial advice. Figures were produced by our calculator and independently recomputed before publication; your lender's own documents govern your loan. Spot an error? Tell us — see also our disclaimer.