How to use this calculator
This calculator answers "how much house can I afford based on salary" using your full monthly cost, not just the loan. Fill in what you know and leave the defaults for the rest.
- Annual income: gross household income before taxes. Couples should enter combined income.
- Monthly debts: minimum payments on car loans, student loans, credit cards, personal loans and child support. Don't include rent, utilities or groceries.
- Down payment: cash you'll put toward the price.
- Rate and term: your lender's quote, or the 7.32% 30-year average from Freddie Mac.
- Property tax, insurance, HOA and PMI: these can change your budget by tens of thousands of dollars, so use local numbers if you have them.
You'll see three price tiers, each with a full payment breakdown. You'll also see your front-end and back-end DTI and an estimate of cash to close. If your debts are holding your budget down, the calculator shows how much paying them off would add.
How we calculate how much house you can afford
We find the highest price whose full monthly payment fits two limits at once.
Gross monthly income = annual income ÷ 12
Housing cap = income × front-end %
Total-debt cap = income × back-end % − other monthly debts
Max housing payment = the lower of the two
Find the price where:
P&I + property tax + insurance + HOA + PMI = max housing payment
PMI only applies if your down payment is less than 20% of the price. We solve for the price numerically, because the tax and PMI change with the price.
Worked example: $100,000 income, $500 a month in debts, $40,000 down, 7.32% for 30 years, 0.9% property tax, $2,400 a year insurance and 0.6% PMI. Gross monthly income is $8,333.
| Tier | Ratios | Home price | Monthly payment | Front / back DTI |
|---|---|---|---|---|
| Comfortable | 25 / 33 | $268,200 | $2,083 | 25.0% / 31.0% |
| Recommended | 28 / 36 | $299,000 | $2,333 | 28.0% / 34.0% |
| Stretch | 33 / 43 | $350,300 | $2,749 | 33.0% / 39.0% |
At the Recommended tier, the $2,333 breaks down as $1,779 P&I, $224 property tax, $200 insurance and $130 PMI. Cash to close is about $48,970: the $40,000 down payment plus 3% of the price.
Debt-to-income ratio for a mortgage: front-end vs back-end
Lenders look at two ratios. Both use your gross income, before taxes.
- Front-end DTI is housing only: P&I, property tax, insurance, HOA and PMI, divided by income.
- Back-end DTI adds every other monthly debt payment.
Which one limits you depends on your debts. In the example above, $500 of debts isn't enough to matter. The 28% housing limit is reached first.
Now raise debts to $900 a month. The back-end limit takes over. The Recommended price drops to $270,300, and back-end DTI sits right at 36%. Paying off that $900 would raise the Recommended budget by about $28,700. The calculator shows this figure whenever debts are the limiting factor. A $400 car payment can cost you more house than a 0.25% rate change.
FHA DTI limits tend to be looser. FHA guidelines often allow higher ratios than conventional loans, especially with good credit or cash reserves. A looser limit means a bigger loan, not necessarily a safer one.
Why your pre-approval isn't your budget
A lender's pre-approval tells you the most you can borrow. It doesn't tell you what you can comfortably pay. Lenders don't see your daycare bill, your retirement savings or your plan to travel.
The three tiers are here to show that range:
- Comfortable (25/33) leaves room for saving, repairs and surprises.
- Recommended (28/36) follows the classic rule many lenders start from.
- Stretch (33/43) is near the most many lenders approve. It leaves a tight budget.
A useful check: take your take-home pay, subtract the housing payment, and see what's left for everything else. Our paycheck calculator shows your take-home pay after federal and state taxes. If the stretch payment leaves no room to save for retirement, it's probably too much.
Cash you need beyond the down payment
The down payment is the biggest check, but not the only one. Plan for:
- Closing costs: typically 2% to 5% of the loan. These cover lender fees, title insurance, appraisal and prepaid taxes and insurance.
- Reserves: many lenders want a few months of payments left in savings after closing.
- Move-in costs: movers, furniture, and repairs the inspection turns up.
- Ongoing maintenance: a common rule of thumb is about 1% of the home's value per year.
The calculator's cash-to-close figure uses 3% of the price for closing costs. Your Loan Estimate will show the real number within three business days of applying.
How much house can I afford on $80k, $100k or $150k?
Here's the Recommended (28/36) price at a few incomes. Each uses $500 in debts, $40,000 down and 7.32%.
| Income | Home price | Monthly payment |
|---|---|---|
| $80,000 | $241,500 | $1,866 |
| $100,000 | $299,000 | $2,333 |
| $120,000 | $356,500 | $2,800 |
These are starting points. Local property taxes and insurance can move them a lot. A home in a high-tax state may support a much lower price than the same salary in a low-tax state.
What salary for a $400k house? Work backward. With 20% down, the full payment is about $2,698. At 28% of gross income, that's about $115,600 a year. With 10% down, PMI pushes the payment to about $3,153, so you'd need about $135,100.
Ways to raise your budget safely
- Pay down debts first. Removing a car or card payment often adds more buying power than a raise.
- Save a bigger down payment. Reaching 20% removes PMI and lowers the loan. Our savings goal calculator shows how long it would take.
- Improve your credit. A higher score typically gets you a lower rate and cheaper PMI.
- Shop rates. Compare offers from several lenders on the same day.
When you've found a price, run it through the mortgage calculator to see the full schedule and PMI dates. If you're still unsure whether to buy at all, try the rent vs buy calculator.
Frequently asked questions
How much house can I afford on $100,000 a year?
With $500 a month in other debts, $40,000 down and a 7.32% rate, the 28/36 rule points to a home around $299,000. That's a full housing payment of about $2,333 a month, including taxes, insurance and PMI. A more cautious budget lands near $268,000, and a stretch budget near $350,000.
How much house can I afford on $80,000 a year?
Using the same assumptions ($500 in debts, $40,000 down, 7.32%), the 28/36 rule suggests about $241,500. That keeps total housing costs near $1,866 a month. A larger down payment or a lower rate would raise that number.
What salary do I need for a $400,000 house?
With 20% down at 7.32%, a $400,000 home costs about $2,698 a month for P&I, taxes and insurance. To keep that at 28% of gross income, you'd need roughly $115,600 a year. With 10% down, PMI pushes the payment to about $3,153, and the salary needed rises to about $135,100.
What is the 28/36 rule?
The 28/36 rule says your housing costs should stay at or below 28% of your gross monthly income. All your debt payments together, including housing, should stay at or below 36%. It's a common starting point for lenders and a sensible guardrail for your own budget.
What debt-to-income ratio do I need for a mortgage?
Many conventional lenders look for a back-end DTI of 36% or less and may approve up to about 43%, sometimes higher with strong credit and savings. FHA loans often allow higher ratios with compensating factors. Approval limits vary by lender and loan program, so treat any single number as a rough guide.
Does the calculator work for couples with two incomes?
Yes. Enter your combined gross household income and all monthly debts for both of you. Lenders typically count both incomes on a joint application, but they also count both people's debts and look at both credit histories.
How much cash do I need besides the down payment?
Plan for closing costs, which typically run 2% to 5% of the loan. Many lenders also want to see reserves, often a few months of mortgage payments left in savings after closing. This calculator estimates cash to close as your down payment plus about 3% of the price.
Sources
Was this calculator helpful?
Written and reviewed by SenseCalc Editorial Team
Calculator builders and personal finance writers
We build and test every SenseCalc calculator against official formulas and sources (IRS, CFPB, Federal Reserve, Freddie Mac), then explain the results in plain English.
Last reviewed October 26, 2026. How we build and check our calculators