How Much House Can I Afford?
Before you fall in love with a listing, find out what you can truly afford. We break down the 28/36 rule, down payments, and the hidden costs of homeownership.
It's the first question every prospective buyer asks, and the most important to get right. Borrow too much and you become "house poor," stretched so thin that one setback causes real trouble. Here's how lenders think about affordability — and how to set a budget you'll be comfortable with for years.
The 28/36 rule
Lenders don't lend you as much as possible; they assess your ability to repay using debt-to-income ratios. The most widely used benchmark is the 28/36 rule:
- 28% (front-end): your monthly housing cost — principal, interest, property taxes and insurance — should stay under 28% of your gross monthly income.
- 36% (back-end): your total monthly debt — housing plus car loans, student loans and credit card minimums — should stay under 36%.
Staying within these limits is a strong sign a home is genuinely affordable rather than a strain.
What actually changes your number
Three levers move your maximum price the most:
- Income — higher income raises your limit directly.
- Existing debts — every monthly payment eats into the 36% cap, lowering what's left for a mortgage.
- Interest rate — even a one-point change can shift your maximum price by tens of thousands of dollars, because a higher rate means more of every payment goes to interest.
A larger down payment also helps: it shrinks the loan, can eliminate PMI (mortgage insurance) at 20% down, and may earn you a better rate.
Can vs. should
A lender qualifies you on gross income, but you live on take-home pay — and a mortgage is only one of many ownership costs. Maintenance (often ~1% of the home's value per year), utilities, repairs, HOA fees and furnishing all add up. Many financially comfortable buyers deliberately borrow below their maximum to keep room for saving and emergencies.
Run your number
Use the home affordability calculator to see your maximum price based on your income, debts, down payment and rate — then compare the resulting payment to the 28/36 benchmark. Knowing your number before you shop keeps you focused and protects you from overbuying.