How much house can I afford on my salary?

Short answer: most lenders consider housing affordable if your total monthly housing costs stay at or below 28 percent of your gross monthly income, and your total debts — housing plus everything else — stay at or below 36 percent. On an $80,000 salary, that works out to roughly $1,867 a month for housing.

But that is what a lender's spreadsheet says, not what your life says. The number you can actually live with depends on your other debts, your spending, how stable your income is, and how much cushion you want. Plenty of people are approved for more house than they can afford comfortably. The smart move is to calculate your own number before a lender hands you theirs.

As of October 2026, the average 30-year fixed mortgage rate is around 7.3 percent, which means every dollar of house costs more per month than it did a few years ago. That makes doing your own math more important, not less.

The 28/36 rule, explained simply

Lenders use two ratios to judge affordability. The first is the front-end ratio: your monthly housing costs — mortgage principal and interest, property taxes, homeowners insurance, and any HOA dues — divided by your gross monthly income. Most conventional lenders want this at 28 percent or less.

The second is the back-end ratio: all of your monthly debts combined — housing plus car payments, student loans, credit card minimums, child support, and anything else on your credit report — divided by your gross monthly income. The common ceiling is 36 percent, though some loan programs go higher.

Here is what that looks like on a few salaries. Take your annual salary, divide by 12 to get monthly gross, and multiply by 0.28 for the housing budget:

• $60,000 salary: $5,000 a month gross, about $1,400 a month for housing
• $80,000 salary: $6,667 a month gross, about $1,867 a month for housing
• $100,000 salary: $8,333 a month gross, about $2,333 a month for housing
• $150,000 salary: $12,500 a month gross, about $3,500 a month for housing

Remember, that housing budget is not your mortgage payment. It is the whole package: principal, interest, taxes, insurance, and HOA fees. The mortgage itself is only part of it.

From monthly payment to home price

To translate a monthly budget into a home price, you need a rough sense of what borrowing costs. At a 7.3 percent rate on a 30-year fixed loan, every $100,000 you borrow costs roughly $685 a month in principal and interest alone.

Walk through the $80,000 example. Your housing budget is $1,867 a month. Property taxes and insurance vary wildly by location, but say they come to $400 a month combined — conservative in many places, optimistic in high-tax states. That leaves about $1,467 for principal and interest. Divide by $685 per $100,000 borrowed, and you can finance roughly $214,000. With a 20 percent down payment, that points to a home price around $267,000.

In a high-tax area, where taxes and insurance might run $700 a month, the same salary supports a noticeably cheaper home — perhaps closer to $225,000. This is why generic online calculators that ignore local taxes and insurance give you a number that feels wrong. Location changes everything.

None of this is a promise from a lender. It is a sketch to get you thinking in the right units.

What lenders will actually let you borrow

Here is the uncomfortable truth: lenders will often approve you for more than the 28 percent guideline. FHA loans, for example, commonly allow a front-end ratio up to 31 percent and a back-end ratio up to 43 percent — and conventional lenders can stretch to similar levels for borrowers with strong credit and cash reserves.

On that $80,000 salary, a 43 percent back-end ratio means a lender might approve total debts up to $2,867 a month. If you have no other debts, that could mean approving a housing payment far above the $1,867 the 28 percent rule suggests. Being approved at that level does not mean it is wise. It means the lender's risk model thinks you will probably not default — which is a lower bar than living comfortably and saving for everything else in your life.

This is the single most important distinction in home buying: approval is about the lender's risk. Affordability is about your life. Use the lender's number as a ceiling you do not have to touch, not a target.

The costs nobody puts in the calculator

The mortgage payment is the biggest line item, but it is not the only one, and the others add up faster than first-time buyers expect:

• Maintenance and repairs. A common guideline is 1 to 2 percent of the home's value per year. On a $300,000 home, that is $3,000 to $6,000 a year — a roof, a water heater, and a broken appliance or two.
• Property tax increases. Taxes are reassessed, and they tend to rise. Budget for them going up, not staying flat.
• Homeowners insurance. It has been climbing in many parts of the country, especially where weather risk is high.
• HOA dues and special assessments, if they apply. These can rise with little warning.
• Utilities and the cost of a bigger space. Moving from an apartment to a house usually means higher electric, water, and heating bills.
• The stuff inside. Furniture, lawn equipment, tools, and all the small purchases that come with a house.

A useful gut check: take your estimated monthly housing cost and add 10 to 15 percent for the things you cannot itemize yet. If that total still fits your budget, you are looking at the right price range.

Down payment and the money you need before day one

How much you put down changes both your monthly payment and what the purchase costs you overall. Twenty percent down avoids private mortgage insurance (PMI), which otherwise adds to your monthly payment until your equity reaches 20 percent. But waiting years to save 20 percent while home prices and rents move has its own cost, and many buyers reasonably choose smaller down payments.

Beyond the down payment, you need closing costs — typically 2 to 5 percent of the purchase price — and you need an emergency fund that stays intact after you buy. This last part matters more than people think. Draining every dollar of savings to close on a house leaves you one broken furnace away from debt. Most financial planners suggest keeping three to six months of expenses in reserve even after the down payment and closing costs are paid.

If buying the house requires emptying your emergency fund to zero, you are probably buying too much house — or buying too soon.

Your debts change everything

Two people earning $80,000 can afford very different houses. If one has no debt and the other pays $600 a month in student loans and car payments, the second person's back-end ratio eats into their housing budget. Lenders look at minimum monthly payments on your credit report, and so should you.

Before you house-hunt, list every monthly debt payment and subtract them from your 36 percent ceiling. What is left is your real housing budget under lender rules. Then ask yourself whether even that feels comfortable, given your actual spending on everything else — food, transport, childcare, the life you want to keep living.

Paying down high-interest debt before buying can do more for your affordability than a small raise. It frees up monthly cash flow, which is what lenders measure, and it frees up mental space, which is what you live in.

A calm way to set your number

Forget the maximum for a moment and work from your real life:

1. Start with your gross monthly income and take 28 percent as a starting housing budget.
2. Subtract realistic property taxes and insurance for the areas you are considering — look these up, do not guess.
3. Subtract HOA dues if relevant.
4. Convert what remains into a loan amount at current rates (roughly $685 a month per $100,000 borrowed at 7.3 percent).
5. Add your down payment to get a target home price.
6. Then subtract 10 to 15 percent as a reality buffer, and make sure your emergency fund survives the purchase.

That number is your personal affordability ceiling. Get pre-approved if you like — pre-approval tells you what the market will offer — but shop with your number, not theirs. If the homes in your number's range do not meet your needs where you want to live, the honest answers are to save a bigger down payment, look in a different area, or wait. All three are better than stretching into a payment that keeps you up at night.

A house should make your life more stable, not less. The right price is the one that lets you pay the mortgage, handle the surprises, and still save for everything else. That number is smaller than the lender's number — and that is exactly the point.