How Much House Can I Afford?
Updated on 20 Oct 2026 · Checked by Aotob
On $100,000 a year you could buy a home up to about $320,000.
That keeps housing at $2,333 a month with $40,000 down (12.5%) at 6.5% over 30 years, using the 28/36 rule most lenders start from. Below 20% down, PMI is included.
Home price you can afford
$320,000
The 28% housing limit sets your budget. Paying off debts would not raise it.
Show the working
Housing budget = min(100,000 × 28% ÷ 12, 100,000 × 36% ÷ 12 − 500) = 2,333.33
Price where P&I + tax + insurance + PMI = budget:
1,772.72 + 293.76 + 150.00 + 116.86 = 2,333.33 → 320,463
What you can afford at other rates
| Rate | Home price | Monthly housing |
|---|---|---|
| 5.5% | 346,000 | 2,333 |
| 6% | 332,000 | 2,333 |
| 6.5% | 320,000 | 2,333 |
| 7% | 308,000 | 2,333 |
| 7.5% | 297,000 | 2,333 |
Questions people ask
What is the 28/36 rule?
Most lenders want your housing costs (mortgage, property tax, insurance and PMI) under 28% of your gross monthly income, and all your debt payments together under 36%. Some loans allow more, but this is a safe starting point.
Do I need 20% down?
No. Many loans accept 3% to 5% down, but below 20% you usually pay private mortgage insurance (PMI). This calculator adds PMI at 0.5% of the loan a year when you put down less than 20%.
What counts as monthly debts?
Minimum payments on car loans, student loans, credit cards and other loans. Not rent, utilities or groceries.
Updated 20 Oct 2026Source: 28/36 guideline (CFPB)Checked by AotobAn estimate, not financial adviceReport an issue