How Much House Can I Afford?
Put in your real numbers and see the price range the standard lending guideline actually supports — before a loan officer, a listing site, or a very confident relative tells you what it should be.
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How it works: the calculator uses the 28/36 guideline most lenders lean on — a housing payment up to 28% of gross monthly income, and total debt payments up to 36%. It assumes property taxes and homeowners insurance together run about 1.6% of the home price per year. HOA dues, mortgage insurance, and closing costs are not included.
Common Questions About How Much House You Can Afford
What is the 28/36 rule, and why does this calculator use it?
It is the shorthand most mortgage lenders have used for decades, and it comes in two halves. The first says your total monthly housing payment — mortgage principal, interest, property taxes and homeowners insurance — should stay at or below 28% of your gross monthly income, meaning income before taxes come out. The second says all of your monthly debt payments added together, the house included, should stay at or below 36%. That second half is the one people forget, and it is usually the one that decides the answer. The calculator above runs both rules, takes whichever gives the smaller number, and works backward from that monthly payment to a home price. It is a guideline rather than a law — individual lenders and loan programs stretch it in both directions — but it is the reference point almost everyone in the transaction is quietly working from.
How much house can I afford on a $75,000 salary?
There is no single answer, and anyone who gives you one has skipped the two variables that matter most: what you already owe each month, and what you can put down. On $75,000 a year, gross monthly income is $6,250, which puts the 28% housing ceiling at $1,750 a month. If you carry no other monthly debt payments and can put $30,000 down at a 6.5% rate on a 30-year loan, that payment supports a home price somewhere in the neighborhood of $260,000. Add a $450 car payment and a $150 student loan payment, though, and the 36% total-debt rule takes over: the ceiling drops to $1,650, and so does the price. Change the interest rate by a single point and the number moves again by tens of thousands. This is exactly why an estimate built on your own figures is worth more than any salary-based rule of thumb.
Does a bigger down payment mean I can afford more house?
Yes, though not in the way most people expect. Your down payment does not raise the monthly payment ceiling — that number is set by your income and your existing debts, and cash in the bank does not change it. What a larger down payment does is shrink the loan you need in order to reach the same price, so every extra dollar you put down adds roughly a dollar to the top of your range, and a bit more besides, because a smaller loan also means less interest inside the same monthly payment. There is one threshold worth knowing about. Below about 20% down, most conventional loans add private mortgage insurance, an extra monthly cost that eats into the very payment ceiling you are working with. Crossing that 20% line removes the cost entirely, which is why the jump from 19% to 20% is worth more than the jump from 9% to 10%.
Do car payments and student loans really change how much house I can buy?
More than almost anything else you control. Under the 36% half of the rule, every monthly obligation you already carry comes straight off the top of what is available for a house payment, dollar for dollar. A $500 car payment is not just $500 a month — at a 6.5% rate over 30 years, it is roughly $65,000 to $70,000 of home price you can no longer reach. Two such payments, and the gap runs past $130,000. One detail catches people out: the guideline counts the size of the payment, not how long you have left on it. A loan with four months remaining weighs exactly the same as one with four years. If a balance is close to cleared, the picture a few months from now can look meaningfully different from the picture today, which is worth knowing before you decide you are further away than you are.
Is what a lender approves the same as what I should actually spend?
Almost never, and the difference is where a lot of quiet stress lives. A pre-approval answers one question: how much a lender is willing to risk, based on documents and ratios. It does not know that you would like to keep travelling, or that your car is eight years old, or that one income in the household might pause for a while. It also leaves out costs that arrive with the keys — maintenance, higher utility bills, a property tax reassessment after the sale, and the furniture for rooms you did not have before. A useful habit is to treat the approval number as the ceiling and then decide separately, on purpose, how far below it you actually want to live. The calculator above gives you that ceiling in about a minute, using your own income, debts and down payment, with no sign-up and no credit check.