Finance guide · 8 min read

How much house can I afford? A step-by-step guide

Most buyers start with one question: how much house can I afford? The useful answer is not just a home price. It is a monthly payment that still leaves room for taxes, insurance, debts, repairs, savings, and real life.

Updated June 27, 2026. Written by Kodotools. Mortgage examples are educational estimates based on standard fixed-rate loan math and rate assumptions around June 2026.

The direct answer

"How much house can I afford" and "how much home can I afford" are really the same question. Most financial guidance starts with the 28/36 rule: spend no more than 28% of gross monthly income on housing costs and no more than 36% on total debt, including the new mortgage.

In rough terms, that can land around 3 to 4.5 times gross annual income at mid-2026 mortgage rates, assuming a reasonable down payment and manageable debt. But your real number depends on debts, down payment, credit profile, interest rate, taxes, insurance, and location. A home affordability calculator, also called a mortgage affordability calculator or home loan affordability calculator, is built to work from your actual numbers.

Free calculator

Estimate your home buying budget

Enter income, debts, down payment, rate, tax, insurance, and HOA assumptions to estimate a comfortable home price.

Open affordability calculator ->

The 28/36 rule, explained

The 28/36 rule has two parts. The front-end ratio says your housing payment should not exceed 28% of gross monthly income. The back-end debt-to-income ratio says all debt payments combined, housing included, should not exceed 36%.

Rule	Calculation	Use
28% housing	Gross monthly income x 0.28	Maximum housing payment guideline.
36% total DTI	Gross monthly income x 0.36 - other debts	Maximum mortgage room after existing debt.
Lower result	Minimum of the two numbers	The more conservative monthly budget.

The rule is not a regulation. Many loans close above 36% DTI, especially with strong credit or reserves, but the guideline is still a useful comfort check before a lender number becomes your target.

Step by step: how to calculate your affordability

Find your gross monthly income before taxes.
Multiply it by 0.28 to estimate a housing payment cap.
List monthly debts such as car loans, student loans, and credit card minimums.
Multiply gross monthly income by 0.36, then subtract those debts.
Use the lower monthly number as your starting housing budget.
Subtract estimated taxes, insurance, and HOA dues to see what is left for principal and interest.
Use the payment amount, interest rate, and term to estimate a loan amount, then add your down payment.

Worked example

Suppose a household earns $90,000 per year, has $400 per month in existing debt, and has $25,000 saved for a down payment.

Step	Result
Gross monthly income	$7,500
28% cap	$2,100
36% cap minus debts	$2,300
Lower number wins	$2,100 monthly housing budget
Estimated taxes and insurance	About $375 per month
Estimated home price	About $298,000 at a 6.5% 30-year rate

Hidden homeownership costs

A mortgage payment is rarely the full story. Real costs that do not always appear in a quick how much home can I afford estimate include maintenance, repairs, utilities, closing costs, HOA dues, and move-in expenses.

Maintenance and repairs: many planning rules reserve roughly 1% to 4% of home value per year.
Closing costs: often around 2% to 5% of the purchase price, due near closing.
Utilities: frequently higher than renting, especially when moving into a larger single-family home.
Insurance changes: some locations face rising premiums because of weather and property risk.

Example budget table

Using the $90,000 income example above, the advertised mortgage payment is only part of the monthly cost.

Item	Monthly cost
Principal and interest	$1,725
Property taxes and insurance	$375
Maintenance reserve	$250 - $1,000
Utilities estimate	$250
Total real cost	$2,600 - $3,350

When to buy less than the calculator says

A calculator is good at math, not judgment. You may want to buy below the estimate if your income is variable, your household depends on one earner, childcare or eldercare costs are coming, insurance is rising in your market, or you want strong savings room after closing.

Treat the estimated home price as a ceiling to stay under, not a target to hit exactly. Being comfortable after closing is more important than maximizing the approval amount.

Related calculators

Home affordability calculatorIncome, debts, down payment, DTI, taxes, insurance, and HOA. Mortgage calculatorFull monthly payment with PMI, taxes, insurance, HOA, and schedule. Mortgage payoff calculatorExtra payments, lump sums, payoff date, and interest savings. Home loan calculatorDown payment, EMI, principal, interest, and home loan schedule.

Frequently asked questions

What salary do I need to afford a $400,000 house?

With a 20% down payment, a 30-year mortgage around mid-2026 rates, and average taxes and insurance, many buyers would want roughly $105,000 to $110,000 in gross annual income to stay near the 28% housing guideline.

Is the rule 3x income or 5x income?

At higher mortgage rates, 3x to 4x income often lands closer to a comfortable budget. A 5x income home price usually needs a large down payment, low debt, lower rate, or higher risk tolerance.

What if my debt-to-income ratio is above 36%?

You may still qualify for some loans, but a higher-DTI mortgage leaves less room for savings, repairs, and emergencies. Compare approval with comfort, not approval alone.

Should I include my partner's income?

If both of you are applying for the mortgage, lenders generally consider both incomes and both sets of debts. If only one person applies, only that person's income and debts count for underwriting.

How much should I save before buying?

Beyond the down payment, plan for closing costs plus an emergency reserve after closing. A common target is 3 to 6 months of expenses, depending on job stability and household risk.