How Much House Can I Afford on My Salary?

Figuring out how much house you can afford on your salary is the most important step before you start shopping. Buy too much house and you risk becoming “house poor” — spending so much on your mortgage that you cannot cover other basics. Buy within your means and homeownership becomes a financial strength instead of a burden.

This guide gives you the exact rules lenders use, real examples at common income levels, and a clear picture of what your full monthly costs will actually look like — not just the mortgage payment.

The 28/36 Rule Explained Simply

The 28/36 rule is the classic starting point for figuring out how much house you can afford on your salary. It says:

• Spend no more than 28% of your gross monthly income on housing costs (mortgage, taxes, insurance)
• Spend no more than 36% of your gross monthly income on all debt combined (housing plus car payments, student loans, credit cards, etc.)

So if you earn $75,000 per year, your gross monthly income is $6,250. The rule suggests your housing payment should stay at or below $1,750 per month, and your total debt payments should not exceed $2,250 per month.

This is a guideline, not a law. Lenders use a related measure called Debt-to-Income ratio (DTI) and their limits often allow more than 36% — but more on that below.

Front-End DTI vs. Back-End DTI

Lenders look at two different DTI numbers when you apply for a mortgage:

Front-End DTI (Housing Ratio)

This is the percentage of your gross monthly income that goes toward your housing payment, called PITI:

• P — Principal (the part of your payment that reduces the loan)
• I — Interest
• T — Property taxes (estimated monthly)
• I — Insurance (homeowners insurance, plus HOA if applicable)

Most conventional lenders want front-end DTI at or below 28%. FHA lenders typically allow up to 31% on the front end.

Back-End DTI (Total Debt Ratio)

This adds all your other monthly debt payments to your housing cost and divides by your gross income. It includes:

• Car loans
• Student loan payments
• Minimum credit card payments
• Personal loans
• Any other recurring debt obligations

Back-end DTI is the number lenders focus on most. See below for limits by loan type.

Lender DTI Limits by Loan Type

Loan Type	Typical Max Front-End DTI	Typical Max Back-End DTI
Conventional (Fannie Mae)	28%	45% (up to 50% with strong credit)
FHA	31%	Up to 57% with compensating factors
VA	No set limit	41% guideline (can exceed)
USDA	29%	41% (up to 44% with strong factors)

FHA’s higher DTI flexibility is one reason it is popular with first-time buyers who carry student loans or car payments. You can learn more at FHA loan requirements for 2026 or compare options at FHA vs. conventional loans for first-time buyers.

Real Examples: How Much House Can You Afford by Salary?

Here is how the math works out at three common income levels. These examples assume a 30-year fixed mortgage at 7%, 5% down payment, and $300/month in existing debt (car payment).

$50,000 per Year ($4,167/month gross)

• 28% front-end limit: $1,167/month for PITI
• 36% back-end guideline: $1,500/month total debt — $300 existing debt = $1,200/month for housing
• Realistic home price range: $140,000 to $165,000

At a 45% back-end DTI (FHA): $4,167 x 0.45 = $1,875 total — minus $300 debt = $1,575/month for housing, which may allow a home price of $185,000 to $200,000 depending on taxes and insurance in your area.

$75,000 per Year ($6,250/month gross)

• 28% front-end limit: $1,750/month for PITI
• 36% back-end guideline: $2,250/month total — $300 existing debt = $1,950/month for housing
• Realistic home price range: $210,000 to $250,000

At 45% DTI (FHA or strong conventional): $6,250 x 0.45 = $2,813 — minus $300 = $2,513/month, potentially allowing home prices up to $285,000 to $310,000.

$100,000 per Year ($8,333/month gross)

• 28% front-end limit: $2,333/month for PITI
• 36% back-end guideline: $3,000/month total — $300 existing debt = $2,700/month for housing
• Realistic home price range: $280,000 to $340,000

At 45% DTI: $8,333 x 0.45 = $3,750 — minus $300 = $3,450/month, potentially allowing home prices up to $410,000 to $430,000 with strong credit and a larger down payment.

These ranges shift depending on your local property taxes, insurance costs, down payment amount, and any HOA fees. The examples above are starting points, not guarantees.

The Real Costs Beyond the Mortgage Payment

Your mortgage payment is just one piece of what homeownership actually costs. Before you decide how much house you can afford on your salary, factor in all of these:

Property Taxes

Property tax rates vary widely by state and county — from under 0.5% in some Southern states to over 2% in parts of New Jersey and Illinois. On a $300,000 home at 1.1% tax rate, that is $3,300/year or $275/month added to your payment.

Homeowners Insurance

The national average is roughly $1,200 to $2,000 per year — about $100 to $170/month. Higher-risk areas (flood zones, hurricane corridors, wildfire regions) can cost significantly more.

HOA Fees

Condos, townhomes, and many planned communities have monthly HOA fees. These range from $50 to $1,000+ per month and are included in your back-end DTI calculation. Always ask about HOA fees before making an offer.

PMI or MIP

If you put less than 20% down, expect to add $100 to $400/month for PMI on a conventional loan or MIP on an FHA loan. See our full breakdown at how much down payment you need.

Maintenance and Repairs

A common rule is to budget 1% of your home’s value per year for maintenance. On a $300,000 home, that is $3,000/year or $250/month. Some years you spend less; others (new roof, HVAC replacement) you spend more.

Utilities

Owning a home typically means higher utility costs than renting — especially if you move from an apartment to a house. Budget for electricity, gas, water, trash, and any additional costs like well or septic maintenance.

How Interest Rates Change What You Can Afford

Interest rates have a massive effect on how much house you can afford on your salary. Here is a clear example using a $300,000 loan over 30 years:

Interest Rate	Monthly P&I Payment	Total Interest Paid (30 yrs)
6.00%	$1,799	$347,514
6.50%	$1,896	$382,633
7.00%	$1,996	$418,527
7.50%	$2,098	$455,280
8.00%	$2,201	$492,514

A 2-percentage-point increase in rate (from 6% to 8%) adds $402/month and roughly $145,000 in total interest over the life of the loan. It also reduces the home price you can afford by about 15% to 20% at the same monthly budget.

This is why getting a good interest rate matters as much as negotiating the home price. Your credit score is the single biggest factor in your rate. See what credit score you need to buy a house to understand where you stand.

Preapproval vs. What You Can Actually Afford

Here is an important distinction most first-time buyers miss: the amount a lender approves you for is not the same as what you should spend.

Lenders calculate your maximum based on your income and debts. They do not account for:

• How much you want to save each month
• Your retirement contributions
• Your children’s activities, childcare, or education costs
• Your lifestyle spending and travel
• Any upcoming large expenses (car replacement, family expenses)

A lender might approve you for $400,000. But if your lifestyle requires $1,500/month in non-debt expenses beyond what the DTI calculation captures, you might be far more comfortable at $300,000.

Use the lender’s preapproval as your ceiling, not your target. Your budget is what feels right when you map out all your real monthly expenses.

Frequently Asked Questions

How much house can I afford on a $50,000 salary?

On $50,000 per year, most lenders using standard DTI guidelines would put your comfortable price range between $140,000 and $185,000, depending on your debts, down payment, local taxes, and loan type. FHA loans can stretch this range slightly higher.

How much house can I afford on a $75,000 salary?

At $75,000 per year, a comfortable range is typically $210,000 to $285,000. With minimal existing debt and a solid down payment, you might qualify for up to $310,000 through FHA or a conventional loan with strong credit.

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

At $100,000 per year, expect a comfortable range of $280,000 to $410,000 depending on your debts, down payment, and loan type. Low existing debt and a 10%+ down payment push you toward the higher end of that range.

Should I buy as much house as the lender approves?

Generally, no. Lender approval is a ceiling based on your income and debts. Your personal budget should account for savings goals, retirement, lifestyle costs, and home maintenance — which lenders do not include. Buying below your maximum approval gives you breathing room.

Does student loan debt count against me when buying a house?

Yes. Student loan payments are included in your back-end DTI calculation. If your loans are in income-driven repayment, FHA uses 1% of the balance as the monthly payment for DTI purposes even if your actual payment is lower. Conventional loans use your actual payment. This can significantly affect how much house you can afford on your salary.

Next, check out the first-time home buyer checklist to see all the steps involved, or review the full steps to buying a house for the first time to understand the process from start to close.