TL;DR — How much house can you afford? Lenders answer with the 28/36 rule: keep total housing costs under 28% of your gross monthly income and all debt payments under 36%. On an $80,000 salary at 2025's rates, that's roughly a $265,000 home with 10% down. But the number that really matters is the payment your budget can carry after groceries, savings, and an actual life.
You can afford a house when the full monthly cost — mortgage, taxes, and insurance — stays under 28% of your gross monthly income and leaves room for everything else in your life. That first half is the lender's math; the second half is yours, and it's where most online affordability calculators go quiet. Vault — a free budgeting app that puts your whole money picture in one place — exists for exactly that second half.
Getting the number right has never mattered more. The median existing-home price in the U.S. hit an all-time high of $435,300 in June 2025, according to the National Association of Realtors, and the 30-year fixed mortgage rate averaged about 6.6% through 2025 in Freddie Mac's weekly survey. At those prices and rates, the gap between "the bank approved me" and "I can genuinely afford this" can be $500 a month — the difference between building savings every year and slowly draining them.
How much house can I afford?
Most buyers can afford a home priced at roughly 3 to 3.5 times their gross annual income, with monthly housing costs under 28% of gross pay and total debt payments under 36%. On an $80,000 salary with typical debts and 10% down at 2025 rates, that works out to a home in the $240,000–$280,000 range.
Treat that as a ceiling, not a target. The sections below show where the rule comes from, how to run it on your own numbers, and why your real answer is usually lower than the bank's.
What is the 28/36 rule?
The 28/36 rule is the affordability guideline most lenders still lean on, and it has two halves:
- 28% — the housing limit. Your total monthly housing cost should stay at or below 28% of your gross (before-tax) monthly income. "Total" means principal and interest plus property taxes, homeowners insurance, and any HOA dues or mortgage insurance — the full payment, not just the loan.
- 36% — the total debt limit. Your housing cost plus every other monthly debt payment — car loans, student loans, minimum credit card payments, child support — should stay under 36% of gross income.
Together these two ratios form what's called your debt-to-income ratio, or DTI. Lenders use it as a quick gauge of whether you can keep up with payments, and the Consumer Financial Protection Bureau notes that DTI limits vary by lender and loan type — many will stretch to 43% or beyond for borrowers with strong credit. Stretch is the right word for it: approval at 43% DTI is a lender protecting their loan, not a promise that the payment fits your life.
A quick example. On an $80,000 salary, gross monthly income is about $6,667. The 28% cap allows $1,867 for total housing. The 36% cap allows $2,400 for housing plus all other debts — so if a car payment and student loan already eat $500, the realistic housing ceiling drops to $1,900 even under the lender's own math.
How much house can I afford on my salary?
Here's the 28/36 rule applied to common salaries. The housing column is the maximum monthly housing cost the rule allows; the price column assumes 10% down, a 6.5% 30-year rate, and about $350 a month for taxes and insurance.
| Annual salary | Monthly gross | Max housing (28%) | Max total debt (36%) | Rough home price* |
|---|---|---|---|---|
| $60,000 | $5,000 | $1,400 | $1,800 | ~$195,000 |
| $80,000 | $6,667 | $1,867 | $2,400 | ~$265,000 |
| $100,000 | $8,333 | $2,333 | $3,000 | ~$335,000 |
| $120,000 | $10,000 | $2,800 | $3,600 | ~$405,000 |
| $150,000 | $12,500 | $3,500 | $4,500 | ~$510,000 |
*Assumes no other debts. Every $100 of existing monthly debt payments removes about $16,000 of home price at current rates.
Two things jump out of that table. First, at 2025's prices and rates, the median home is out of reach for the median-income buyer under the classic rule — which is exactly why so many buyers end up stretching past 28%. Second, existing debts hit hard: a $450 car payment doesn't just cost $450 a month, it quietly shrinks the house you're allowed to buy by more than $70,000.
How to calculate how much house you can afford in 5 steps
- Start with your gross monthly income. Annual salary divided by 12, before taxes and deductions. Two buyers? Add both incomes — but consider running the numbers on one income as a stress test.
- Multiply by 0.28. That's the maximum the rule allows for total housing: principal, interest, taxes, insurance, and any HOA dues.
- Subtract estimated taxes and insurance. A reasonable starting estimate is $300–$450 a month combined on a mid-priced home, though property taxes vary enormously by state. What remains is what you can spend on principal and interest — the actual loan payment.
- Convert the payment to a loan amount. Use this quick conversion table for a 30-year fixed mortgage:
| Interest rate | Monthly principal & interest per $100,000 borrowed |
|---|---|
| 5.5% | $568 |
| 6.0% | $600 |
| 6.5% | $632 |
| 7.0% | $665 |
- Add your down payment. Loan amount plus down payment equals the home price you can afford. With less than 20% down, budget for private mortgage insurance too — typically 0.5% to 1% of the loan amount per year, added to your monthly bill.
Worked example on that $80,000 salary: $1,867 max housing, minus $350 for taxes and insurance, leaves $1,517 for principal and interest. At 6.5%, that's $1,517 ÷ $6.32 per thousand — a loan of about $240,000. Add a 10% down payment and you're shopping around $265,000. That's the honest version of "how much should I spend on a house" on that income.
What lenders count — and what they ignore
Your DTI only sees payments with a contract attached. That makes it a strange lens for a decision this big:
| Counts in DTI | Ignored by DTI |
|---|---|
| The new mortgage payment | Groceries and household spending |
| Property taxes, insurance, HOA | Utilities, gas, phone bills |
| Car loan or lease payments | Childcare (often $1,000+ a month) |
| Student loan payments | Retirement and savings contributions |
| Minimum credit card payments | Medical costs and insurance premiums |
| Child support and alimony | Vacations, gifts, and everything fun |
That right-hand column is where budgets break. A lender can approve you at 36% DTI while your daycare bill alone is bigger than the car payment they did count. Nothing in the approval process knows you save 15% for retirement, or that your emergency fund is about to be emptied into the down payment, or that you refuse to give up traveling to see family twice a year. The lender's number measures the bank's risk. Only yours measures your life.
Why the bank's number is not your number
Approval math assumes a generic household with no daycare, no aging car, no hobbies, and no goals beyond the mortgage. Real households have all of those, and the difference shows up monthly, for thirty years.
The buyers who stay comfortable share one habit: they decided their housing payment from their spending, not from a lender's ceiling. They measured what a normal month actually costs, subtracted it from take-home pay, and treated the remainder as the true housing budget. If you've never measured your real spending, this is the moment to start — before the pre-approval, not after the closing. The process in how to start budgeting takes one evening to set up and about a month to produce trustworthy numbers.
How a budget finds your real number
The honest calculation is simple: take-home pay minus everything you actually spend and save, with what's left over being the housing payment your life can absorb. Vault does the quiet work here. Your spending lives in envelopes by category, so "everything else" isn't a guess — it's groceries, transport, and fun, each with a real number attached. The reports view shows each month's income against each month's spending, which is exactly the surplus a mortgage payment would consume. And because Vault syncs across devices, the numbers you review together at the kitchen table are the same ones you updated from your phone at the store.
There's also a rehearsal trick worth stealing: for three months before you buy, bank the difference between your current rent and the future housing payment. Expecting $2,100 and paying $1,400 rent? Move $700 a month into savings. If that feels easy, your number is real. If it stings, you've learned something priceless for the cost of one quarter — and the savings become part of the down payment.
How to afford more house without stretching
If the number you calculated feels tight against the market you're shopping in, these levers actually move it:
- Grow the down payment. Every extra dollar down both shrinks the loan and — at 20% — eliminates mortgage insurance entirely. A realistic plan for building it is in how to save for a house down payment.
- Kill existing debts first. Paying off a $450 car payment adds roughly $70,000 of buying power at current rates — often more than a raise would. The order of attack matters; debt snowball vs. avalanche compares both.
- Raise your credit score. The gap between a 660 and a 760 score can be half a percentage point on the rate — about $35 a month per $100,000 borrowed, every month for 30 years. The playbook is in how to improve your credit score.
- Shop a smaller or cheaper home. The Midwest median price was barely half the Western one in 2025. The same salary buys a very different life in a different ZIP code — or a different floor plan.
- Let time work. A raise, a paid-off loan, and two more years of savings can move the number more than any clever loan structure. Renting one more year is not failing; it's reloading. (On that note: how much to spend on rent keeps the waiting period from eating the down payment.)
Frequently asked questions
How much house can I afford on a $100K salary?
On a $100,000 salary, the 28/36 rule allows up to $2,333 a month for total housing. With 10% down, a 6.5% rate, and about $400 for taxes and insurance, that's roughly a $300,000–$340,000 home — assuming you carry little other debt. A $400 monthly car and student loan payment would pull the ceiling closer to $270,000.
What is the 28/36 rule for mortgages?
The 28/36 rule says your total monthly housing costs — principal, interest, taxes, and insurance — should stay under 28% of your gross monthly income, while housing plus all other debt payments should stay under 36%. Lenders use it as a quick affordability screen, though many approve loans at higher ratios for strong borrowers.
Does rent count in my debt-to-income ratio?
No — your current rent is not a debt, so it doesn't appear in your DTI while you're renting. When you buy, rent disappears and the new full mortgage payment (principal, interest, taxes, insurance, HOA) counts in its place. What lenders do count are car loans, student loans, minimum credit card payments, and support obligations.
How much should I put down on a house?
Twenty percent down avoids private mortgage insurance and shrinks the monthly payment, but many first-time buyers put down far less — loans exist at 3% to 10% down. The trade-off is PMI, typically 0.5% to 1% of the loan amount per year, plus a larger loan and payment. A smaller down payment is a financing choice, not a failure — just price it in.
Can I afford a house if I still have student loans?
Usually, yes — lenders count your monthly student loan payment, not the full balance, in your DTI. The test is whether housing plus that payment plus everything else stays near or under 36% of gross income. If it doesn't, paying the loans down — or choosing a smaller home — beats stretching the ratio.
The bottom line
How much house can you afford? Run the 28/36 rule for the lender's ceiling — housing under 28% of gross income, all debts under 36% — then run your actual budget for the real answer, which is usually lower and always more trustworthy. At 2025's prices and rates, that honesty is the difference between a home that secures your finances and one that silently consumes them.
Find the payment your life actually fits — build your budget in Vault.
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