How Much House Can I Afford?
The highest home price your income supports, under the 28/36 rule of thumb and under the most lenders allow, with the monthly payment worked out line by line.
Before taxes, for everyone who will be on the loan.
Car and student loans, minimum credit card payments, child support. Not rent, utilities or groceries.
The cash you will put down, not counting closing costs.
Filled in: Freddie Mac's average for a 30-year fixed loan in the week of October 15, 2026. Use the rate on your own offer if you have one.
Typical property tax and insurance from Census data for 2024. You can see and change them just below.
Property tax, insurance, HOA and PMI
Share of the home's price each year. Your county's rate may differ.
Only if the home is in a homeowners association.
Charged with less than 20% down. Your lender quotes it; 0.5% is only an example.
Comfortable price (28/36 rule of thumb)
$309,500
You can afford a home up to about $309,500, with a monthly payment of $2,333: 28% of your income before taxes.
The housing share is the limit: 28% of your $8,333 monthly income. Your other debts ($400) keep the total under 36%.
Lender maximum (Fannie Mae, 50% with Desktop Underwriter)
$486,900
The most the published ratios allow, with a monthly payment of $3,767. Only some borrowers qualify for it.
| Comfortable | Maximum | |
|---|---|---|
| Home price | $309,500 | $486,900 |
| Down payment | −$40,000 | −$40,000 |
| Amount borrowed | $269,500 | $446,900 |
| Principal and interest7.4% for 30 years | $1,865.96 | $3,094.25 |
| Property tax | +$229.55 | +$361.12 |
| Homeowners insurance | +$125.00 | +$125.00 |
| PMI | +$112.29 | +$186.21 |
| Monthly house payment | $2,332.80 | $3,766.58 |
| House payment ÷ income | 28% | 45.2% |
| All debts ÷ incomewith $400 of other debts | 32.8% | 50% |
Price at each published limit
| Limit | Home price | Payment |
|---|---|---|
| 28/36 rule of thumb (28% / 36%) | $309,500 | $2,333/mo |
| Fannie Mae, manual underwriting (36%) | $342,500 | $2,600/mo |
| Fannie Mae, manual, strong file (45%) | $435,300 | $3,350/mo |
| Fannie Mae, Desktop Underwriter (50%) | $486,900 | $3,767/mo |
A lender can count your income, debts, taxes and insurance differently, and also looks at your credit score, savings and the appraisal. These numbers apply the published ratios to what you entered; they are not a loan approval. Closing costs come on top of the down payment.
This is an estimate to help you plan, not financial advice. Your bank, lender or plan may round, time or charge things differently.
How this is calculated
The calculator looks for the highest price at which your monthly house payment stays within a limit. The payment is worked out exactly as in our mortgage calculator: principal and interest, property tax, homeowners insurance, PMI or FHA mortgage insurance, and HOA dues. It tries prices and narrows them down to the nearest $100.
Lenders use two ratios to your gross (before-tax) monthly income. The housing ratio counts the house payment alone; the debt-to-income ratio adds your other monthly debts: car and student loans, minimum credit card payments, child support. The house payment can be no more than the smaller of the two budgets: housing limit × income, or total limit × income minus your other debts.
Example (the numbers filled in above): $100,000 a year is $8,333.33 a month. Under 28/36, the house payment may be $2,333.33 (28%), and all debts $3,000.00 (36%); minus the $400 of other debts that leaves $2,600.00, so the 28% housing limit is the smaller one. With $40,000 down, a 30-year loan at 7.4% (Freddie Mac's average for the week of October 15, 2026), property tax of 0.89% and insurance of $1,500 a year (U.S. medians), the highest price is $309,500: principal and interest $1,865.96, tax $229.55, insurance $125.00 and PMI at 0.5% $112.29, together $2,332.80.
The 28/36 rule of thumb
Spend at most 28% of gross income on housing and 36% on all debts together. It is a rule of thumb used widely by banks and personal-finance writers, not a rule of any federal agency: the Consumer Financial Protection Bureau's page on debt-to-income ratios gives no fixed limit and says that different loan products and lenders have different limits. We use it for the comfortable price because it leaves room in the budget for everything else.
What lenders allow
Conventional loans mostly follow the rules of Fannie Mae and Freddie Mac. Fannie Mae's Selling Guide (B3-6-02) sets a maximum debt-to-income ratio of 36% for manually underwritten loans, up to 45% when the borrower meets its credit score and reserve requirements, and 50% for loans approved through its automated system, Desktop Underwriter. It sets no separate housing limit.
| Fannie Mae | Housing | All debts |
|---|---|---|
| Fannie Mae, manual underwriting | No separate limit | 36% |
| Fannie Mae, manual, strong file | No separate limit | 45% |
| Fannie Mae, Desktop Underwriter | No separate limit | 50% |
FHA loans follow HUD Handbook 4000.1. For manually underwritten loans it allows a housing ratio of 31% and a debt-to-income ratio of 43% (also the most for credit scores from 500 to 579), 37% and 47% with one compensating factor such as cash reserves, and 40% and 50% with two. Energy-efficient homes may go to 33% and 45%. For loans approved by FHA's automated scorecard, the handbook sets no fixed ratio.
| FHA, manual underwriting | Housing | All debts |
|---|---|---|
| FHA, manual underwriting | 31% | 43% |
| FHA, one compensating factor | 37% | 47% |
| FHA, two compensating factors | 40% | 50% |
The maximum shown above is the highest of these for your loan type. Only some borrowers get there: Fannie Mae's 45% needs the credit score and reserves in its eligibility rules, 50% an approval through Desktop Underwriter, and FHA's higher ratios compensating factors such as cash reserves.
Is 43% still the limit?
No. Until 2021 the federal definition of a “general qualified mortgage” capped the debt-to-income ratio at 43%. The Consumer Financial Protection Bureau replaced that cap with a price-based test (12 CFR 1026.43(e)(2), rule of December 29, 2020, effective March 1, 2021, required from October 1, 2022). Lenders must still consider your debt-to-income ratio or residual income, but the law no longer sets a number.
What the calculator leaves out
Closing costs, cash reserves, your credit score and the appraisal. The PMI rate is an example: lenders price it by credit score and down payment. Property tax can change after a sale if the county reassesses the home. Loan limits apply: FHA limits depend on the county, and conventional loans above $832,750 in 2026 are jumbo loans with their own rules.
The state presets fill in the median property tax paid divided by the median home value, and the median insurance premium reported by homeowners with a mortgage, from the Census Bureau's American Community Survey for 2024. See the income needed in every state for the full table.
Sources
Checked against the sources below on .
- Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios (04/02/2025): maximum DTI 36%, 45%, 50%
- HUD Handbook 4000.1 (updated August 12, 2026), II.A.5.d.viii Approvable Ratio Requirements (Manual): 31/43, 37/47, 40/50
- 12 CFR 1026.43(e)(2): General qualified mortgage definition (price-based, no DTI limit)
- Federal Register 85 FR 86308 (December 29, 2020): CFPB General QM final rule removes the 43% DTI limit
- Federal Register 86 FR 22844 (April 30, 2021): mandatory compliance date October 1, 2022
- Consumer Financial Protection Bureau: What is a debt-to-income ratio? (no fixed limit given)
- Freddie Mac: Primary Mortgage Market Survey, weekly 30-year fixed rate
- FHFA: Conforming loan limit values for 2026 ($832,750 baseline, $1,249,125 ceiling)
- U.S. Census Bureau: American Community Survey 2024 1-year estimates (state property tax and home value, for the state presets)
- U.S. Census Bureau: ACS 2024 Public Use Microdata Sample (homeowners insurance, for the state presets)
- 12 U.S.C. § 4901: Homeowners Protection Act, definitions (cancellation date, termination date, original value)
- 12 U.S.C. § 4902: Termination of private mortgage insurance (80% request, 78% automatic, midpoint)
- Consumer Financial Protection Bureau: When can I remove private mortgage insurance (PMI) from my loan?
- Consumer Financial Protection Bureau: What is private mortgage insurance?
- HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Appendix 1.0 Mortgage Insurance Premiums; II.A.2 minimum investment)
- HUD Mortgagee Letter 2023-05: Reduction of FHA annual mortgage insurance premium rates
- HUD: Monthly (periodic) mortgage insurance premium calculation
- HUD Mortgagee Letter 2025-23: 2026 nationwide forward mortgage loan limits
Questions people ask
How much house can I afford on $100,000 a year?
About $300,500 under the 28/36 rule, with no other debts, 10% down and a 30-year loan at 7.4%, the U.S. median property tax and insurance, and PMI at 0.5%. The payment would be $2,333 a month. Other debts, a lower rate or more down change the answer.
How much income do I need to buy a $400,000 house?
About $131,325 a year to keep the payment at 28% of income, with 10% down at 7.4% for 30 years, U.S. median property tax and insurance, and PMI at 0.5%: a payment of $3,064 a month.
What is the 28/36 rule?
Spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts, the house payment included. It is a common rule of thumb, not a legal limit; lenders often allow more.
What debt-to-income ratio do lenders allow?
Fannie Mae allows up to 36% for manually underwritten loans, up to 45% with a strong credit score and reserves, and up to 50% through its automated system. For FHA loans underwritten by hand, HUD allows 31% for housing and 43% in total, and up to 40% and 50% with two compensating factors.
Is the 43% debt-to-income ratio still a rule?
No. The Consumer Financial Protection Bureau removed the 43% cap from the general qualified mortgage definition in a rule that took effect in 2021, and replaced it with a test based on the loan's price. Lenders still weigh your debts, but each loan program sets its own maximum.
Do I need 20% down to buy a house?
No. With less than 20% down a conventional loan usually comes with private mortgage insurance, which ends automatically when the balance is scheduled to reach 78% of the home's original value. FHA loans need at least 3.5% down with a credit score of 580 or higher.