How much house can I afford on $100,000 a year?

Using the 28% front-end guideline, roughly $2,333 per month for full housing costs. After typical property tax and insurance, that supports a loan near $290,000–$310,000 at 6.5%, implying a purchase price around $360,000–$390,000 with 20% down. Existing car or student loan payments reduce this, sometimes substantially.

What is the 28/36 rule?

A long-standing guideline that housing costs stay at or below 28% of gross monthly income and total debt at or below 36%. Modern automated underwriting is more permissive — qualified mortgages generally allow back-end ratios to 43%, and some programmes to 50% with compensating factors — but 28/36 remains a reasonable conservative target.

Should I use my full pre-approval amount?

Usually not. Pre-approval measures what a lender will lend against gross income and credit-reported debts. It does not know about childcare, tuition, medical costs, retirement saving or your risk tolerance. Buying meaningfully below the ceiling is what preserves the ability to absorb a repair, a rate change or a lost income.

No. Conventional loans go to 3%, FHA to 3.5%, and VA and USDA to zero for eligible borrowers. Twenty percent avoids PMI and improves pricing, but waiting years to reach it has its own cost if prices and rates move. The right choice depends on how the PMI premium compares with your local rate of price growth.

How much cash do I need beyond the down payment?

Plan for 2–5% of the purchase price in closing costs, plus moving expenses and immediate repairs. Lenders may also require reserves — liquid assets left after closing, often expressed as several months of payments. On a $400,000 purchase, $10,000–$20,000 beyond the down payment is a realistic planning figure.

Does paying off debt increase how much I can borrow?

Yes, and often dramatically. Every $100 of monthly debt eliminated frees $100 for housing, which supports roughly $15,000–$16,000 more loan at 6.5% over 30 years. Clearing a $450 car payment can add around $71,000 to your budget — typically faster than saving the equivalent down payment.

Mortgage Affordability Calculator (2025) — How Much Can You Afford?

Find out how much home you can afford based on your income, debts, and down payment. Uses the 28/36 and 43% DTI rules lenders apply.

Annual Gross Income ($)

Monthly Debt Payments (car, student, etc.) ($)

Down Payment ($)

Homeowners Insurance ($/mo) ($)

Interest Rate (%)

Property Tax Rate (%)

Loan Term (years)

Maximum Home Affordability

$458,315

Maximum Home Purchase Price

$398,315

Max Loan Amount

$3,258

Total Monthly Payment

$2,650

Monthly P&I

37.6%

Debt-to-Income Ratio

Your DTI is 37.6%. Lenders prefer under 43%. Your monthly housing payment would be $3,258.

Analysis & insights

Based on your income and the 28% front-end DTI guideline, you can afford a home up to $458,315 (loan amount $398,315). That puts your total monthly housing cost at $3,258 — roughly 37.6% of gross monthly income. You're above the comfortable range. Consider a less expensive home or a larger down payment to bring this down.

Pushing the limit

Above the standard guideline. Lenders may approve with compensating factors but you'll feel the squeeze.

Risk & benchmark gauge

Current band

Stretched

Front-end DTI: 37.6%

0255075100

ComfortableAcceptableStretchedUnaffordable

Industry benchmarks

Max home price you can afford$458,315
Max loan amount$398,315
Total monthly housing (PITI)$3,258
Front-end DTI37.6%
Lender-preferred front-end≤ 28%
Standard upper bound36% (front) / 43% (back)

Key insights

28/36/43 — the lender math

28% front-end (housing ÷ income), 36% back-end (housing + all debts ÷ income), 43% absolute conforming-loan ceiling. Cross any of these and you need compensating factors (large reserves, excellent credit, low LTV).

Just because you CAN doesn't mean you SHOULD

The lender's max approval is the ceiling, not the recommendation. Most financial planners suggest staying 5-10 percentage points below max for breathing room.

Recommended actions(4)

Get pre-approved before house-hunting

High priority

Pre-approval letters give negotiation leverage and confirm the calculated max with a real lender (with real credit pull, asset verification, income docs).

Build a 6-month PITI emergency fund FIRST

Medium priority

Reserves are what lenders check after DTI. They're also what keeps you from foreclosure if you lose a paycheck. Don't skip this.

Reduce target home price by 10-15%

Medium priority

Aiming under the 28% front-end DTI gives margin for life surprises (kids, medical, job change). Your future self will thank you.

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This tool is for educational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional for advice specific to your situation.

What is Mortgage Affordability?

There are two different questions hidden inside "how much house can I afford". The first is what a lender will approve, which is a mechanical calculation from your income, debts and credit. The second is what you can carry comfortably alongside retirement saving, childcare, travel and the irregular costs of owning a building. These two numbers are rarely the same, and the gap between them is where most housing stress originates.

Lenders underwrite to gross income — your salary before tax, retirement contributions and health premiums. Your life runs on what actually lands in your account, which is typically 70–80% of that figure. A payment that consumes 31% of gross can consume 40% or more of take-home, and no underwriting model accounts for that.

This calculator shows the lender ceiling and then lets you pressure-test it against your real budget, because the approval letter is a constraint, not a recommendation.

The formula — how to calculate Mortgage Affordability

Max housing payment = Gross monthly income × Front-end ratio Max total debt = Gross monthly income × Back-end ratio

Front-end ratio: = housing cost alone as a share of gross income — traditionally 28%
Back-end ratio: = all recurring debt including housing — traditionally 36%, commonly allowed to 43%
Housing cost: = full PITI plus HOA dues, not just principal and interest
Other debt: = car loans, student loans, credit card minimums, child support, personal loans

The binding constraint is whichever ratio is reached first. For borrowers with meaningful car or student loan payments, the back-end ratio almost always binds before the front-end one.

Step-by-step example

01Household gross income $120,000, so $10,000 per month. Existing debts: $450 car payment and $300 student loan = $750.
02Front-end test at 28%: maximum housing payment = $10,000 × 0.28 = $2,800.
03Back-end test at 36%: maximum total debt = $10,000 × 0.36 = $3,600. Subtract existing debt: $3,600 − $750 = $2,850 available for housing.
04The front-end limit of $2,800 binds, so that is the working housing budget.
05Now strip out the non-mortgage components. Property tax at 1.1% on a roughly $430,000 home ≈ $394/month; insurance ≈ $150/month. That leaves about $2,256 for principal and interest.
06At 6.5% over 30 years, $2,256 per month supports a loan of roughly $357,000.
07With 20% down, that implies a purchase price near $446,000 — and the down payment required is about $89,000, plus 2–5% in closing costs.
08Under a more permissive 43% back-end limit, the same household could be approved near $560,000 — over $110,000 more house on identical income.

What lenders count, and what they ignore

Underwriting is narrower than most buyers expect. It captures debts that appear on a credit report and little else, which is precisely why approval can substantially exceed comfort.

Counted as debt —: mortgage PITI, HOA dues, car loans and leases, student loans, credit card minimum payments, personal loans, court-ordered alimony and child support.
Not counted at all —: childcare, health insurance premiums, groceries, utilities, commuting costs, retirement contributions, tuition, and every discretionary expense.
The consequence —: a household paying $2,000 a month for daycare is underwritten identically to one paying nothing, despite a $24,000 annual difference in obligations.

Approval is a ceiling, not a target

Automated underwriting will approve many borrowers at a 43% back-end ratio, and some programmes stretch to 50%. Borrowing at that level leaves almost no room for a roof replacement, an insurance repricing, a job change or a new child — the events that turn an affordable mortgage into a distressed one.

How much cash you actually need at closing

The down payment is the headline number but rarely the whole requirement. Closing costs typically run 2–5% of the purchase price and are due at the same time, covering lender fees, title insurance, appraisal, recording fees and prepaid escrow.

Lenders also want to see reserves — liquid assets remaining after closing, often expressed in months of housing payments. Requirements vary by loan type and borrower profile, and are stricter for investment properties than for a primary residence.

On a $446,000 purchase with 20% down, the realistic cash requirement is roughly $89,000 down plus $9,000–$22,000 in closing costs, before any reserve expectation or moving and immediate repair costs.

Down payment options and their trade-offs

Loan type	Minimum down	Mortgage insurance	Note
Conventional 20%+	20%	None	Avoids PMI entirely; best pricing
Conventional low-down	3–5%	PMI until 78–80% LTV	Cancellable, unlike FHA
FHA	3.5%	MIP, usually for the life of the loan	Lower credit score tolerance; removal generally requires refinancing
VA (eligible veterans)	0%	None	Funding fee applies; no monthly mortgage insurance
USDA (eligible rural areas)	0%	Guarantee fee	Geographic and income restrictions apply

The costs that never appear in the affordability calculation

Ongoing maintenance is the largest omission. A widely used planning heuristic is 1–2% of the home's value annually, which on a $446,000 house is $4,500–$9,000 a year. It arrives unevenly — nothing for three years, then a $14,000 roof — which is why it is best treated as a monthly sinking fund rather than an occasional surprise.

Utilities usually rise on moving from renting to owning, both because owned homes are typically larger and because water, sewer, refuse and lawn care are often bundled into rent.

Property taxes reassess. In many jurisdictions a sale resets the assessed value to the purchase price, so the tax you inherit from the seller's disclosure can understate what you will actually pay from year two onward.

Homeowners insurance has risen steeply in wildfire, hurricane and hail-exposed regions, and in some markets it has become the fastest-growing component of the payment. Get a quote for the specific address before making an offer, not a regional estimate.

Test the payment before you commit to it

For three months, transfer the difference between your current rent and the proposed full housing payment into savings. If that is comfortable, the budget is real. If it is not, you have learned it at no cost — and you have accumulated part of a down payment either way.

What actually raises your budget

Paying off a car loan is often the single most effective lever. Eliminating a $450 monthly payment frees the same $450 for housing, which at 6.5% over 30 years supports roughly $71,000 in additional loan — usually more than a year of aggressive down-payment saving achieves.

Credit score improvements move pricing rather than ratios. The difference between a 680 and a 760 score can be a meaningful fraction of a percentage point, which on a $357,000 loan compounds into tens of thousands over the term.

A larger down payment cuts the loan, removes PMI at 20%, and improves rate pricing at several tiers. It is the slowest lever but the one that improves every other number simultaneously.

Extending to a 30-year term rather than 15 raises the qualifying amount substantially by lowering the required payment, at the cost of far more lifetime interest.

Key considerations

Get pre-approved rather than pre-qualified. Pre-approval involves verified documentation and carries weight with sellers; pre-qualification is an estimate.
Rate locks are time-limited. Confirm the lock period covers your expected closing timeline.
Do not open new credit or finance a car between pre-approval and closing — lenders re-pull credit before funding and the approval can be withdrawn.
Model the payment at a rate one percentage point higher than quoted if you are not locked.
Budget maintenance at 1–2% of home value per year as a standing monthly transfer.
HOA dues count fully against your ratios and can reduce a qualifying price by tens of thousands.
If both partners' incomes are required to qualify, consider whether the payment survives a period on one income.

Common mistakes to avoid

Treating the pre-approval amount as the shopping budget.
Calculating affordability from principal and interest only, then discovering taxes and insurance add 20–30%.
Forgetting closing costs of 2–5% on top of the down payment.
Ignoring HOA dues while shopping, then losing qualifying power at application.
Underwriting your own budget on gross income the way the lender does, rather than on take-home.
Making no allowance for maintenance, then financing the first major repair on credit.
Buying at the ceiling with no reserves, leaving no margin for a rate reset, insurance increase or income interruption.

Frequently asked questions

Sources & references

Written and fact-checked by the CalcProLabs Editorial Team against CFPB and Fannie Mae underwriting guidance. Read our calculation methodology and editorial policy.

Last updated July 28, 2026