How much house can I afford?
Most lenders' rule of thumb is the 28/36 rule: housing costs up to 28% of your gross monthly income, and all debts including housing up to 36%. On a $100,000 household income with $500 a month of other debts and $40,000 down, that buys a home of about $309,000 at a 7.4% 30-year rate, including property tax and insurance.
How do interest rates affect how much house I can afford?
Higher rates put more of each payment toward interest, so the same budget buys less house. For the $100,000 household above, a rate 1 point lower (6.4%) raises the budget from $309,000 to $332,000, about 7% more house. At the 2021 low of 2.65%, the same payment would have bought $447,000.
| Rate | Home you can afford | vs. 7.4% today |
|---|---|---|
| 3% | $434,000 | +$126,000 |
| 4% | $400,000 | +$91,000 |
| 5% | $369,000 | +$60,000 |
| 6% | $342,000 | +$33,000 |
| 6.27% (a year ago) | $335,000 | +$26,000 |
| 7% | $318,000 | +$9,000 |
| 7.4% (today) | $309,000 | — |
| 8% | $296,000 | −$12,000 |
| 9% | $277,000 | −$31,000 |
How much house can I afford on my salary?
At 7.4% with 10% down and no other debts, a household can afford roughly 3.0 times its yearly income: about $225,000 on $75,000, $300,000 on $100,000 and $450,000 on $150,000. Other monthly debts lower these figures.
| Household income | At 7.4% | At 6% | At 5% |
|---|---|---|---|
| $50,000 | $150,000 | $168,000 | $183,000 |
| $75,000 | $225,000 | $252,000 | $275,000 |
| $100,000 | $300,000 | $336,000 | $366,000 |
| $125,000 | $375,000 | $420,000 | $458,000 |
| $150,000 | $450,000 | $504,000 | $549,000 |
| $200,000 | $600,000 | $673,000 | $732,000 |
| $250,000 | $750,000 | $841,000 | $915,000 |
What is the 28/36 rule?
A lending guideline that keeps housing costs (mortgage principal and interest, property tax, home insurance, mortgage insurance and HOA dues) at or below 28% of gross monthly income, and total debt payments at or below 36%. Many lenders approve higher ratios, up to about 45% to 50% of income for some loans, but the 28/36 rule leaves room in the budget for everything else.
What are mortgage rates today?
The average 30-year fixed rate was 7.4% for the week of October 15, 2026, according to Freddie Mac, and the 15-year rate was 6.71%. A year earlier the 30-year rate was 6.27%. It hit a record low of 2.65% in January 2021 and climbed to 7.79% in October 2023. Your own rate depends on your credit score, down payment and loan type.
How the calculator works
- Your monthly budget is the lower of 28% of gross monthly income, and 36% minus your other debt payments.
- The home price is the highest one whose principal and interest, property tax, insurance, HOA dues and any mortgage insurance fit that budget.
- Mortgage insurance of 0.5% of the loan a year applies when you put down less than 20%. If 20% down is the tipping point, the calculator stops there rather than add it.
- Property tax defaults to 0.9% and insurance to 0.5% of the home value a year. Change them under “Taxes, insurance and HOA” to match your area.