How Much House Can I Afford? A Straight Answer
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The quick answer: the 28/36 rule
The traditional benchmark is that your total housing payment should stay under 28% of gross monthly income, and all your debt payments combined — housing, cars, student loans, minimum card payments — under 36%.
On a $90,000 salary, that is $7,500 a month gross, so $2,100 for housing and $2,700 for all debt.
| Gross salary | 28% housing budget | Rough house price at 6.5% |
|---|---|---|
| $60,000 | $1,400/mo | $185,000 – $215,000 |
| $80,000 | $1,867/mo | $250,000 – $290,000 |
| $100,000 | $2,333/mo | $315,000 – $360,000 |
| $150,000 | $3,500/mo | $475,000 – $545,000 |
| $200,000 | $4,667/mo | $630,000 – $725,000 |
Assumes 20% down, a 30-year loan at 6.5%, and typical property tax and insurance. The range reflects how much county tax rates vary. Run your own numbers in the mortgage calculator.
What lenders will actually approve
Lenders are considerably more generous than the 28/36 rule, because they are pricing default risk rather than your quality of life.
- Conventional loans commonly approve a back-end debt-to-income ratio up to 45%, and up to 50% with strong reserves or a high credit score.
- FHA loans frequently go to 50%, with 3.5% down available at a 580 credit score.
- VA loans have no formal DTI cap and use a residual income test instead — often the best terms available if you qualify.
A 45% approval on a $100,000 salary means $3,750 a month of debt payments. That is legal, common, and for most households genuinely uncomfortable.
Start from your take-home pay instead
Every affordability rule uses gross income, which is not money you have. On $100,000 in California, take-home is roughly $72,000 — so a "28% of gross" payment of $2,333 is actually 39% of what reaches your account.
A more honest approach: calculate your real monthly take-home with the paycheck calculator, subtract everything you already spend, and see what genuinely remains. If the answer is uncomfortable at 3 a.m., it is the wrong house.
The costs buyers forget
| Cost | Typical amount | When |
|---|---|---|
| Closing costs | 2%–5% of price | At signing |
| Maintenance | 1% of home value per year | Ongoing, unpredictable |
| Property tax increases | Reassessed after purchase | Often year two |
| Homeowners insurance | $1,200–$2,500/yr, rising fast | Ongoing |
| HOA dues | $0–$700+/mo | Ongoing, can be raised |
| PMI | 0.3%–1.5% of loan/yr | Until 80% LTV |
| Moving and furnishing | $3,000–$15,000 | First few months |
The 1% maintenance rule is an average, not a schedule. It arrives as a $9,000 roof in year four, not $250 a month.
How the down payment changes everything
The same $400,000 house at 6.5% over 30 years:
| Down payment | Loan | P&I payment | PMI | Total monthly |
|---|---|---|---|---|
| 3% ($12,000) | $388,000 | $2,452 | ~$162 | $2,614 |
| 10% ($40,000) | $360,000 | $2,275 | ~$120 | $2,395 |
| 20% ($80,000) | $320,000 | $2,023 | $0 | $2,023 |
Principal and interest only — property tax, insurance and HOA come on top. The 20% option saves $591 a month against 3% down, and removes PMI entirely.
A sanity check worth doing
Before you commit, live on the new payment for three months. Set up an automatic transfer of the difference between your current rent and the proposed full housing payment into savings you do not touch.
If those three months are fine, you have both proved the budget works and built a larger down payment. If they are not, you have learned it for the cost of nothing.
Frequently asked questions
How much house can I afford on a $100,000 salary?
Roughly $315,000–$360,000 with 20% down at current rates, applying the 28% rule. A lender may approve considerably more — often up to $450,000 — but that pushes housing costs well past a comfortable share of take-home pay.
Is the 28/36 rule outdated?
It is conservative in today’s market, and in high-cost cities almost nobody meets it. Treat it as the point beyond which you should be deliberate rather than a hard line — but understand that every point above it is real risk.
Should I put down less than 20%?
Sometimes. PMI is a real cost, but so is spending three more years renting while prices rise. If PMI is under a few hundred a month and you can remove it within a few years through appreciation or overpayment, buying earlier often wins.
Does a bigger down payment or a shorter term save more?
A shorter term saves far more interest, but raises the required payment. A larger down payment lowers the payment and can remove PMI. If you can only do one, most buyers benefit more from 20% down.
How much should I have saved before buying?
The down payment, plus closing costs of 2%–5%, plus a maintenance and emergency fund of three to six months of expenses. Emptying your savings into a down payment is how a broken furnace becomes credit card debt.
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Related guides
This guide is general information from ToolNest, not financial, legal or tax advice. Figures are estimates based on the assumptions stated and current at the time of writing. For decisions that matter, speak to a qualified professional in your own country.