How much house can you afford?

The 28/36 rule, what current rates do to your budget, and the honest gap between what a lender approves and what you can comfortably carry.

The short version

The most-used guideline for home affordability is the 28/36 rule: spend no more than 28% of your gross monthly income on housing, and no more than 36% on all your debt combined. On a $100,000 income (about $8,333 a month), that is roughly $2,333 for housing and $3,000 for total debt.

The 28/36 rule at a few income levels:

Gross monthly income	Max housing payment, 28%	Max total debt, 36%
$5,000	$1,400	$1,800
$8,333	$2,333	$3,000
$12,000	$3,360	$4,320

A rougher rule of thumb at today's rates: most people can afford a home priced around 3 to 4 times their annual income with a solid down payment. But the number that quietly controls everything is the interest rate, because it decides how much home each dollar of payment buys. And there is an important gap to understand: what a lender will approve is often well above what you can comfortably carry. This explains both.

The 28/36 rule, and what it counts

The rule has two halves, both expressed as a share of your gross (pre-tax) monthly income.

The 28% front-end is your housing payment, and "housing" here means the full payment, not just the loan. It includes principal, interest, property taxes, and homeowners insurance, the pieces often abbreviated PITI, plus mortgage insurance and any HOA dues. This is the number people underestimate, because a basic mortgage calculator shows only principal and interest, while the taxes and insurance can add hundreds of dollars a month.

The 36% back-end is all your monthly debt added together: the housing payment plus car loans, student loans, credit card minimums, and any other recurring debt. This is your debt-to-income ratio, or DTI, and it is one of the most important numbers a lender looks at.

A quick worked example. Say you earn $120,000 a year, $10,000 a month. The 28% rule caps your housing payment around $2,800. The 36% rule caps your total debt around $3,600, so if you already pay $600 a month on a car and student loans, that leaves roughly $3,000 for housing. Notice that your existing debt directly shrinks what you can spend on a home, dollar for dollar. Paying down a car loan or a credit card before you buy truly increases your buying power.

Why the interest rate changes everything

Here is the part that catches people off guard: the same income buys dramatically different amounts of home depending on the rate.

Take a $600,000 home with 20% down on a 30-year loan. At a 6% rate, the principal and interest run about $2,878 a month. At 7%, that same loan jumps to about $3,193, over $300 more a month for the identical house, purely because of the rate. (For contrast, in the very-low-rate window of early 2021, that same loan was around $2,023. That era is gone, and budgets built on it no longer apply.)

As of mid-2026, 30-year fixed rates have been hovering just below 6.5%, with some quotes in the high-6s depending on credit and the loan. At those levels, here is roughly what different incomes support, assuming 20% down and average taxes and insurance:

Around $75,000 of income supports a housing payment near $1,750 a month, which translates to a home roughly in the $240,000 to $280,000 range, depending on local taxes.
Around $100,000 of income supports a housing payment near $2,333, pushing the affordable price meaningfully higher.

These are starting estimates, not promises. Your down payment, your existing debt, your credit score, and your local property-tax rate all move the number, sometimes a lot. Florida and Texas, with higher property taxes, compress these figures; lower-tax areas stretch them.

The gap between "approved" and "comfortable"

This is the most important thing in the whole topic, and the part the rule alone does not tell you.

Lenders will often approve you for far more than the 28/36 rule suggests. Many conventional loans allow a DTI up to 45%, and some loan types go higher, FHA can stretch into the 50s. So a lender might bless a payment that eats 43% of your income. The question is whether you should take it.

Run the real arithmetic on a stretch budget. Suppose you earn $100,000 a year, take home around $6,250 a month after taxes, and a lender approves a $4,167 housing payment. Subtract that and a few hundred in other debt, and you are left with roughly $1,500 a month for everything else: groceries, utilities, gas, insurance, childcare, retirement, an emergency fund, and the inevitable home repairs. For most households, especially with kids, that is uncomfortably tight, and it is the definition of being "house poor": technically approved, practically trapped.

The honest recommendation most financial advisors give is to aim below the maximum, targeting a housing payment around 30% to 35% of gross income rather than the 43% to 50% a lender might allow. That leaves room for life, for saving, and for building wealth outside your home equity. The bank's job is to assess whether you can make the payment. Your job is to decide whether you can make it and still have a life. Those are different questions, and only you can answer the second one.

The costs the rule leaves out

Even a careful 28/36 calculation misses some real expenses of owning, so budget for them separately:

Maintenance. A common guideline is 1% to 2% of the home's value per year. On a $400,000 home, that is $4,000 to $8,000 annually for the roof, HVAC, appliances, and the hundred smaller things that break.
The upfront cash beyond the down payment. Closing costs are typically a few percent of the price, on top of your down payment, and your lender will often collect an initial escrow deposit at closing to fund the first months of taxes and insurance.
Rising taxes and insurance. Your principal and interest are fixed on a fixed-rate loan, but property taxes and insurance premiums can climb over time, raising your real monthly cost even when your "mortgage" hasn't changed.

How to figure your own number

A practical sequence: start with your gross monthly income and multiply by 0.28 for a first-pass housing ceiling. Then subtract your existing monthly debts from the 36% figure to see what's left for housing after your obligations. Run a real payment estimate at today's rate, including taxes and insurance, not just principal and interest. Then, deliberately, consider targeting something below the maximum, so the payment leaves room to live and save. And get pre-approved, which gives you a real number from a lender based on your actual finances and credit, rather than an estimate.

The goal is not to borrow the most you can. It is to buy a home you can carry comfortably through job changes, rate-driven cost increases, and the ordinary surprises of life, with enough left over to keep building toward everything else you want.

Frequently asked questions

What is the 28/36 rule?

Spend no more than 28% of your gross monthly income on total housing costs (principal, interest, taxes, insurance, plus HOA and mortgage insurance if any), and no more than 36% on all debt combined (housing plus car, student loans, and credit cards). It is a widely used affordability guideline, not a law, and many lenders allow higher ratios.

How much house can I afford on my income?

A rough rule at current rates is 3 to 4 times your annual income with a solid down payment. More precisely, apply the 28% rule to your gross monthly income for a housing-payment ceiling, then adjust for your existing debt, down payment, credit, and local taxes. Around $75,000 of income tends to support roughly a $240,000 to $280,000 home at today's rates; $100,000 supports meaningfully more.

How much do mortgage rates change what I can afford?

A lot. On a $600,000 loan scenario, moving from a 6% to a 7% rate adds over $300 to the monthly payment for the same home. Higher rates shrink how much home each dollar of payment buys, which is why affordability is so sensitive to where rates sit (just below 6.5% as of mid-2026).

Should I borrow the maximum a lender approves?

Usually not. Lenders may approve a DTI of 45% or higher, but that can leave you house poor, approved on paper, stretched in practice. Most advisors suggest targeting a housing payment around 30% to 35% of gross income so you have room for savings, emergencies, and everyday life.

What costs does the 28/36 rule leave out?

Ongoing maintenance (budget 1% to 2% of the home's value per year), closing costs and the upfront escrow deposit at purchase, and future increases in property taxes and insurance. A payment that fits the rule today can still strain a budget that ignores these.

Sources: Bankrate and Freedom Mortgage on the 28/36 rule and DTI thresholds; multiple 2026 affordability guides and lender calculators on income-to-price estimates at current rates; Bankrate on mortgage-rate levels (just below 6.5% as of mid-2026) and rate-to-payment math. Figures are illustrative and vary by down payment, credit, existing debt, and local taxes, get a personalized pre-approval for your real number.

This article is general information, not financial advice. Talk to a licensed lender or financial advisor about your specific situation before making a home-buying decision.