Buying Tools
Home Affordability Calculator
Find out how much house you can afford based on income, debts, and DTI limits. Real numbers — no signup required.
Affordability Details
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Insights
How Home Affordability Works in 2026
Calculating how much house you can afford goes beyond simply looking at your annual salary. Lenders evaluate your purchasing power by examining your gross monthly income, existing monthly debt obligations, available cash for a down payment, current mortgage interest rates, and local property taxes and insurance costs.
The primary metric lenders use is the Debt-to-Income (DTI) ratio, divided into front-end (housing costs as a percentage of income) and back-end (housing plus all other recurring debts as a percentage of income) ratios. Staying within recommended DTI thresholds ensures you secure competitive loan terms without becoming "house poor."
In 2026, fluctuating interest rates and home prices mean that even small adjustments to your down payment or monthly debt payments can significantly alter your maximum qualifying purchase price.
DTI: The 28/36 Rule Explained
The 28/36 rule has long been the gold standard for conservative mortgage lending. Under this rule, your total monthly housing payment (Principal, Interest, Property Taxes, Homeowners Insurance, HOA fees, and PMI if applicable) should not exceed 28% of your gross monthly income. Furthermore, your total debt load—housing payment plus auto loans, student loans, credit card minimums, and personal loans—should not exceed 36% of your gross monthly income.
Frequently asked questions
How much house can I afford with my salary?
A general guideline is the 28/36 rule, meaning your housing costs should not exceed 28% of your gross monthly income, and your total debt payments (housing plus student loans, credit cards, auto loans) should not exceed 36%. For example, with an annual income of $120,000 ($10,000/mo), your target housing payment would be around $2,800/mo.
What is the 28/36 rule?
The 28/36 rule is a standard benchmark used by conventional mortgage lenders. The front-end ratio (28%) caps your total monthly mortgage payment (principal, interest, taxes, insurance, HOA, PMI) relative to gross income. The back-end ratio (36%) caps total monthly debt payments. In 2026, many lenders approve up to 43% or 50% with compensating factors.
Does my credit score affect affordability?
Yes, significantly. Your credit score directly determines your mortgage interest rate. A higher credit score secures a lower rate, reducing your monthly principal and interest payments and increasing the maximum home purchase price you can qualify for under the same monthly budget.
How much down payment do I need?
While conventional loans allow as little as 3% down and FHA loans require 3.5%, putting down 20% eliminates private mortgage insurance (PMI) and lowers your monthly payment. A larger down payment also reduces your loan amount, directly expanding your home purchasing power.
What DTI do lenders require in 2026?
While traditional conforming guidelines prefer 36% back-end DTI, Qualified Mortgages (QM) permit up to 43%, and government-backed programs (FHA, VA, USDA) frequently approve back-end debt-to-income ratios up to 50% for borrowers with strong credit or financial reserves.