Enter your income, debts, and down payment to see how much home you can comfortably afford. See your conservative, comfortable, and stretch budget instantly.
Figuring out how much house you can afford is one of the most important steps in the home buying process. The answer depends on your income, existing debts, down payment, interest rates, and how much financial cushion you want to keep.
Most financial advisors recommend the 28/36 rule. Your monthly housing costs (mortgage payment, taxes, insurance) should not exceed 28% of your gross monthly income — this is called the "front-end" ratio. Your total monthly debts (housing plus car payments, student loans, credit cards) should not exceed 36% of your gross income — the "back-end" ratio.
Lenders evaluate your debt-to-income ratio (DTI), credit score, employment history, and savings. Most conventional lenders want a back-end DTI below 43%, though some will go higher with strong compensating factors like excellent credit or large cash reserves. FHA loans may allow DTI up to 50% in some cases.
A larger down payment means you borrow less, which lowers your monthly payment and can eliminate the need for PMI (private mortgage insurance). Putting down 20% is ideal but not required. FHA loans allow as little as 3.5% down, and some conventional loans accept 3-5% down payments.
Remember: Just because you qualify for a certain amount doesn't mean you should borrow that much. Leave room in your budget for maintenance, emergencies, and enjoying your life. The "comfortable" estimate in our calculator uses the more conservative 28% DTI guideline for this reason.
As a quick reference, to afford a $300,000 home with 20% down at 6.5% interest, you'd typically need a household income of around $75,000-$85,000. For a $500,000 home, you'd need roughly $120,000-$140,000. These are rough estimates — use the calculator above for numbers specific to your situation.
If you're a first-time buyer, look into FHA loans, USDA loans (for rural areas), VA loans (for veterans), and state-specific down payment assistance programs. Many of these programs have more flexible DTI requirements and lower down payment minimums, which can significantly expand what you can afford.
Calculate your mortgage payment, check your DTI, or estimate closing costs.