How Much House Can I Afford?

By Muhammad Asad · Last updated: 2026-10-01

On a $100,000 salary, the 28/36 rule says your housing payment shouldn't pass $2,333 a month — and with a $60,000 down payment and $400 a month in other debts at a 6.5% 30-year rate, that works out to roughly a $337,000 home. The number a lender approves and the number your budget can actually live with are two different things, and this guide shows you how to find both.

The 28/36 rule in plain English

Lenders check your ability to carry a mortgage with two ratios, together called the 28/36 rule:

Front-end ratio (28%): your total housing costs shouldn't exceed 28% of gross monthly income. Housing costs means everything: principal and interest, property taxes, homeowners insurance, PMI if you put down less than 20%, and HOA dues.
Back-end ratio (36%): all of your monthly debt payments combined — housing plus car loans, student loans, credit card minimums, child support — shouldn't exceed 36% of gross monthly income.

On a $100,000 salary, gross monthly income is $8,333. So the ceilings are $2,333 a month for housing and $3,000 a month for all debts. The ratio of total debt to income is called your debt-to-income ratio (DTI), and you'll see it on every mortgage discussion from here on.

Which rule actually binds you?

Both rules apply at once, and the tighter one wins. Which one binds depends on your other debts:

Example: same $100,000 salary, but now with $800 a month in car and student loan payments and only a $20,000 down payment. The front-end rule still allows $2,333 for housing — but the back-end rule says total debts can't pass $3,000, so housing gets whatever's left: $3,000 − $800 = $2,200 a month. The back-end rule binds, and the affordable price falls to about $281,000. Our affordability calculator shows "headroom" — here it's $0, meaning the debts rule is the binding one.

Go back to the first scenario ($60,000 down, $400 in debts): the back-end ceiling is $3,000 − $400 = $2,600, which is looser than the front-end $2,333 — so the front-end rule binds, with $266.67 of headroom. Debts only bite when they're big enough to make the 36% ceiling the binding one. That's why paying off a car before buying can sometimes free up more buying power than saving a slightly bigger down payment.

What the numbers look like at three incomes

All examples below use a 6.5% 30-year rate, and the calculator's standard assumption that roughly 25% of the housing budget goes to property tax and insurance (more on that below):

$75,000 salary, $30,000 down, $350/month debts: max housing $1,750/month → roughly a $238,000 home.
$100,000 salary, $60,000 down, $400/month debts: max housing $2,333/month → roughly a $337,000 home.
$150,000 salary, $60,000 down, $1,200/month debts: max housing $3,300/month → roughly a $452,000 home.

Notice the $150,000 earner's price isn't 1.5× the $100,000 earner's — the heavier debts ($1,200/month) drag it down, and the down payment doesn't scale with income. Your price is a bundle of four inputs, not a multiple of your salary.

Debts drag the price down fast

Here's a clean comparison from the calculator's math: on a $100,000 salary with a $60,000 down payment at 6.5% for 30 years, raising other monthly debts from $400 to $900 — an extra $500 a month in car or student loan payments — drops the affordable home price from $336,869 to $309,182. That's $27,687 of house erased by $500 of monthly debt.

The mechanism is the back-end ratio: every dollar of debt is a dollar that can't go to housing. If you're shopping for a home in a year or two, killing a $500 car payment can do more for your buying power than grinding out a few extra thousand in savings.

How a monthly payment becomes a home price

The 28/36 rule gives you a monthly budget, not a price tag. Turning $2,333 a month into a home price requires two assumptions, and ours are worth knowing:

Taxes and insurance take ~25%. The calculator's price estimate assumes roughly a quarter of the housing budget goes to property tax and homeowners insurance, leaving ~75% for principal and interest. In a high-tax state that share is bigger, so the same income buys less house; in a low-tax state, more.
Down payment gets added. The loan amount is whatever the P&I portion of your budget supports at your rate and term; your down payment is added on top to reach the home price. Bigger down payment, bigger reachable price — at the same monthly cost.

These are estimates, not appraisals. Real quotes for tax and insurance on the specific property always beat a rule of thumb — get them early, because they move the number.

Lenders qualify on gross; you live on net

One more gap to mind: lenders run the 28/36 math on gross income — your full $100,000, before a dollar of tax comes out. But your mortgage gets paid from take-home pay. Federal income tax, FICA, and state tax take roughly 20–25% of a $100,000 salary (see our affordability calculator and the paycheck math for your state), and retirement contributions come out too.

That means a $2,333 housing payment is about 28% of gross but closer to a third of what actually lands in your account. If the rule's answer already feels tight, it is — budget on net, qualify on gross, and keep the two ideas separate.

Why you might buy less than the rule allows

The 28/36 rule is a ceiling, not a target. A few reasons to aim under it:

Approval maxes run hotter. Many loan programs approve DTIs of 43–45%. Being "approved" at 43% doesn't mean it's comfortable — it means the lender thinks you'll probably pay.
Houses cost more than PITI. Maintenance (budget ~1% of the home's value a year), repairs, and furnishings don't appear in the 28/36 math. The rule prices the loan, not the homeownership.
Slack is a feature. A payment at 22% of income instead of 28% leaves room for an emergency fund, retirement savings, and the year the furnace dies. "House poor" is what happens when the payment leaves no room for the rest of life.

A useful test: if the max payment from the rule would force you to cut retirement contributions or run without savings, the house is too expensive for you — even if a lender says yes.

Run your own numbers

Plug your actual income, down payment, debts, rate, and term into our affordability calculator — it works the 28/36 rule both ways, shows which ratio is binding, and breaks out the max housing payment, max rent, and max car payment your income supports. Then take the resulting price to our mortgage calculator to see the full PITI breakdown on a real listing.

Assumptions and limits

All figures on this page are for 2026 and use a fixed 6.5% 30-year rate with the calculator's 28/36 logic and its ~25%-for-tax-and-insurance assumption for home-price estimates. Real tax assessments, insurance premiums, PMI rates, and lender DTI limits vary by location, loan program, and credit profile. These are planning estimates, not financial advice — a lender's pre-approval uses your full credit picture, and only you know what payment your budget can live with.

Frequently asked questions

How much house can I afford on a $100,000 salary?

With a $60,000 down payment, $400 a month in other debts, and a 6.5% 30-year rate, the 28/36 rule points to roughly a $337,000 home with a maximum housing payment of about $2,333 a month. More debts or a smaller down payment push that price down; fewer debts push it up.

What is the 28/36 rule?

Two guardrails lenders use: housing costs (principal, interest, taxes, insurance, PMI, HOA) should not exceed 28% of gross monthly income, and all monthly debts combined should not exceed 36%. They are guidelines for what you can service, not a guarantee of approval or comfort.

Does the 28/36 rule use gross or net income?

Gross income — your salary before taxes. Lenders qualify you on gross pay. But your budget runs on take-home pay, so a house that passes the rule on paper can still feel tight once taxes, retirement savings, and other bills come out.

How do car payments and student loans affect how much house I can afford?

They count in the 36% back-end ratio. On a $100,000 salary with $800 a month in other debts, the back-end rule caps housing at $2,200 a month instead of $2,333 — and the affordable home price drops to about $281,000 with a $20,000 down payment.

Should I buy as much house as I am approved for?

Not automatically. Lenders often approve up to 43–45% debt-to-income, well above the 28/36 comfort zone. Buying at your maximum leaves no slack for repairs, rate risk on adjustable loans, or income shocks — the classic recipe for being house poor.

How much of a down payment do I need?

Twenty percent down avoids PMI and gets you the lender's best rate tier, but it's not required — many buyers purchase with 3–10% down. Our calculator folds your down payment into the home price, so a bigger down payment directly raises the price you can reach.

Why is my affordable price lower in high-tax states?

The calculator's home-price estimate assumes property tax and insurance take roughly 25% of the housing budget. In high-tax states that share is bigger, leaving less room for the mortgage payment itself — so the same income buys less house.