How Much House Can You Afford?
5 min read · Last reviewed August 10, 2026
Before you start viewing homes, it's worth knowing your ceiling — not just what a bank will lend, but what fits comfortably alongside the rest of your life. Borrowing the maximum is rarely the same as borrowing wisely.
This guide covers the budgeting rule, how far it sits from what lenders actually allow, the factors that set your budget, and the ongoing costs that catch first-time buyers out.
The 28/36 rule
A widely used guideline: your monthly housing cost shouldn't exceed 28% of your gross monthly income (the 'front-end' ratio), and your total debt payments — housing plus car, cards, and loans — shouldn't exceed 36% (the 'back-end' ratio).
Take the lower of those two limits as a monthly payment, then work backwards to a loan amount. Paying down other debts or saving a larger deposit both raise how much you can afford.
28/36 is stricter than what lenders allow
It's often described as the rule lenders use. It isn't — it's a personal-finance convention, and real underwriting is looser. Fannie Mae's Selling Guide caps total DTI at 36% for manually underwritten loans but allows up to 45% when credit-score and reserve requirements are met, and up to 50% through Desktop Underwriter.
The old 43% figure is also out of date as a rule. The CFPB's General QM Final Rule removed the 43% DTI limit and replaced it with price-based thresholds tied to how far a loan's APR sits above the average prime offer rate, with a mandatory compliance date of 1 October 2022. Plenty of lenders still apply 43% as their own overlay.
The practical point: a lender may approve you for noticeably more than 28/36 suggests. That gap is the margin between what you can borrow and what leaves room for the rest of your life.
What actually sets your budget
Four levers move the number most: your income, your existing monthly debts, the size of your down payment, and the interest rate. A bigger deposit and a lower rate both stretch your budget further; more existing debt shrinks it.
Because rates change the monthly payment so much, it's worth re-checking your budget whenever rates move.
The costs buyers forget
The mortgage payment is only part of the picture. Budget also for property taxes, home insurance, any HOA or service charges, maintenance (a rough rule is 1% of the home's value a year), and — if your deposit is under 20% — mortgage insurance.
Leave headroom. A payment that's technically affordable but leaves nothing for emergencies isn't really affordable.
Frequently asked questions
▶How much house can I afford on my salary?
It depends on your other debts, down payment, and interest rate — not income alone. The 28/36 rule gives a conservative starting point, deliberately stricter than lender maximums; the affordability calculator turns your numbers into a specific budget.
▶Should I borrow the maximum the bank offers?
Usually not. The maximum can leave your budget stretched with no room for tax, insurance, maintenance, or emergencies. Borrowing below your ceiling is more comfortable and less risky.
Try the calculators
Find out how much house you can afford based on your income, debts, and down payment.
Open calculator →Estimate your monthly mortgage payment, total interest, and payoff cost from the home price, deposit, rate, and term.
Open calculator →Calculate your DTI ratio — the number lenders use to decide how much you can borrow.
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