See exactly how much house you can afford in 2026. Free calculator uses 28/36 rule, current 6.2% rates, taxes, insurance, PMI. Get your max price now.
If you earn $100,000/year, you can afford a house priced between $300,000 and $400,000 — not the $500,000 a lender will happily approve. The gap between what you qualify for and what you can actually afford is where most first-time buyers get trapped into house-poor territory.
Here's the fast-math breakdown using the 28/36 rule, the industry benchmark most mortgage underwriters and financial planners use:
At a $100K salary ($8,333/month gross), your housing ceiling is $2,333/month. At today's 6.25% 30-year fixed rate, that monthly payment supports a home around $340,000 with 20% down — assuming $4,000/year property taxes and $1,500/year insurance.
This content is for educational purposes only and does not constitute financial advice. Consult a qualified financial advisor or mortgage professional before making major purchasing decisions.
The 28/36 rule originated with Fannie Mae underwriting guidelines in the 1970s and remains the default sanity check for responsible home purchases. Banks will often stretch to 43% DTI (debt-to-income) under qualified mortgage rules — and FHA loans allow up to 50% DTI in some cases — but that's the ceiling for approval, not affordability.
Your total housing payment (PITI plus HOA if applicable) should not exceed 28% of your gross monthly income. This reserves enough of your paycheck for retirement savings, groceries, transportation, and the surprise $3,000 HVAC replacement.
Add up every recurring debt payment: mortgage, car loans, minimum credit card payments, student loans, personal loans, child support. That total should stay under 36% of gross monthly income. If you have a $450 car payment and $300 in student loans, your housing budget shrinks by $750/month before you start.
Here's exactly how much house you can afford at common income levels, assuming minimal other debt, a 6.25% 30-year fixed mortgage, and national-average property taxes/insurance:
| Annual Income | Max Monthly PITI (28%) | Max Home Price | Down Payment (20%) |
|---|---|---|---|
| $50,000 | $1,167 | $165,000 | $33,000 |
| $75,000 | $1,750 | $250,000 | $50,000 |
| $100,000 | $2,333 | $340,000 | $68,000 |
| $125,000 | $2,917 | $425,000 | $85,000 |
| $150,000 | $3,500 | $510,000 | $102,000 |
| $200,000 | $4,667 | $685,000 | $137,000 |
| $250,000 | $5,833 | $860,000 | $172,000 |
Notice how earning 2x the income ($50K → $100K) more than doubles affordability ($165K → $340K)? That's because fixed costs like property taxes and insurance become a smaller percentage at higher price points — but this only works if you keep other debts low.
Mortgage calculators show you principal and interest. Actual homeownership adds these on top:
National average is 1.1% of home value annually, but ranges from 0.28% in Hawaii to 2.23% in New Jersey. A $400,000 home in Texas (1.68% average) costs $6,720/year in taxes — $560/month on top of your mortgage. Always pull the specific rate for your county from your local tax assessor's website before budgeting.
Average cost in 2026: $1,800/year nationally, but $5,000+ in hurricane-exposed Florida and California wildfire zones. Get 3 quotes before closing — policy costs vary 40%+ between carriers for identical coverage.
If your down payment is under 20%, expect 0.3% to 1.5% of loan value annually in PMI premiums. On a $320,000 loan, that's $80–$400/month extra until you reach 20% equity. FHA loans carry MIP (Mortgage Insurance Premium) that often stays for the life of the loan.
Budget 1% of home value per year for maintenance — $3,400/year ($283/month) on a $340K home. Older homes (pre-1980) run closer to 2%. This isn't optional: roofs last 20-25 years, HVAC systems 15-20 years, water heaters 10-12 years.
HOA fees range from $200–$800/month in condos and planned communities. Utility costs average $400–$600/month depending on square footage and climate — often double what renters pay since apartments are smaller and share walls.
Every 1% rate change shifts your buying power by roughly 10%. Here's the same $2,333 monthly payment (what $100K income supports) at different rates:
This is why timing a purchase to Fed policy cycles matters. If rates drop from 6.25% to 5.25% after you buy, refinancing can save $200+/month on the same loan. For a deeper look at how the Fed's decisions affect your mortgage, see our guide on how Fed rate changes ripple into housing.
Gets you into a house fastest. On a $340K home, that's $10,200 down — vs. $68,000 for 20%. Tradeoff: PMI adds $150–$250/month, and you're borrowing $330K instead of $272K, so your payment is roughly $400/month higher at 6.25%.
The practical middle ground. You'll pay PMI but it drops off faster (usually 5-7 years in), and you have real skin in the game. Most first-time buyers land here.
Eliminates PMI, gets you the best rate (lenders typically offer 0.125–0.25% lower rates), and builds instant equity. But saving $68,000 often takes 7-10 years — and waiting that long means you might face higher prices and rates when you finally buy.
Running the math: if home prices rise 4% per year while you save for 20% down, the extra year of saving may cost you more in price appreciation than you save on PMI. For a detailed breakdown, read our down payment vs. waiting analysis.
Before signing anything, run your finances through these four stress tests:
If you fail any of these, you're buying more house than you can afford — regardless of what your pre-approval letter says. Pair this with our compound interest calculator to see what the difference between renting and buying could look like invested.
Closing costs typically run 2% to 5% of the loan amount. On a $272,000 loan (20% down on $340K), that's $5,440–$13,600 due at closing, separate from your down payment. Line items include:
Some states (New York, Pennsylvania) push closing costs to 5%+ due to heavy transfer taxes. Always request a Loan Estimate from at least 3 lenders and compare line by line.
Not comfortably. At $80K income ($6,667/month gross), the 28% rule caps housing at $1,867/month — which supports about a $265,000 home at today's rates with 20% down. A $400,000 house would push you to roughly 42% of gross income, classified as house-poor. You could qualify for the loan with low other debt, but expect to sacrifice retirement contributions, travel, and emergency savings to make it work.
A 760+ FICO score gets you the lowest advertised rates. Between 620 (typical conventional minimum) and 760, you might pay 0.5%–1.0% more in interest — which reduces buying power by 5-10%. On a $100K income, that's the difference between affording a $340K home (760+ score) and a $305K home (640 score). Spend 3-6 months improving your score before shopping if you're under 740.
Stay conservative. Lenders approve based on today's income and ignore lifestyle costs (daycare, retirement contributions, vacations). Financial planners overwhelmingly recommend buying at 70-80% of your max approval. This leaves room for rate increases on ARMs, job disruptions, and the genuine joy of not obsessing over every unexpected expense.
Only if both incomes go on the loan application. Dual-income households typically qualify for ~1.8x what a single earner qualifies for, because lenders factor in additional risk (one job loss cuts income in half). Also: if one spouse has a poor credit score, applying jointly could raise your rate — sometimes it's better to qualify on the higher-score income alone.
At minimum: down payment + closing costs (2-5% of loan) + 3-6 months of PITI in emergency reserves + $5,000-$10,000 for immediate home expenses (appliances, moving, initial repairs). For a $340K home with 10% down, that's $34,000 down + $10,000 closing + $14,000 reserves + $7,000 moving = ~$65,000 total. Buying with less is financially fragile.
Author: Ziv Shay | Last updated: April 19, 2026
This content is for educational purposes only and does not constitute financial advice. Mortgage rates, tax rates, and insurance costs vary by location and change frequently. Consult a qualified mortgage professional and financial advisor before making a home purchase decision.
The content on this page is for informational purposes only and should not be considered financial advice. Rates, terms, and offers are subject to change. We may earn a commission through affiliate links at no extra cost to you. See our full disclaimer.
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