How much house can I afford on my salary?

The traditional guideline is 3-4x your annual gross salary. At $80,000: $240,000-$320,000 home price range. More precisely, use the 28/36 rule: housing costs under 28% of gross monthly income and total debts under 36%. Current interest rates significantly affect this calculation -- use the home affordability calculator for a precise number.

What is the 28/36 rule for home affordability?

The 28/36 rule: housing costs (mortgage, taxes, insurance, HOA) should not exceed 28% of gross monthly income, and total debt obligations should not exceed 36%. These are lender guidelines -- financially conservative households often target 20-25% on housing to maintain flexibility for savings, emergencies, and other financial goals.

How much down payment do I need?

The minimum varies by loan type: 3% for conventional (with PMI), 3.5% for FHA, 0% for VA and USDA. The optimal is 20% to avoid Private Mortgage Insurance. On a $300,000 home, 20% down = $60,000. PMI typically costs 0.5-1.5% of the loan value annually ($125-$375/month on a $300K loan) until you reach 20% equity.

What are the hidden costs of buying a home?

Beyond the mortgage: property taxes (1-3% of value annually), homeowner’s insurance ($1,000-$3,000/year), maintenance and repairs (1-2% of value/year), HOA fees if applicable ($0-$600+/month), and closing costs (2-5% of purchase price). Total hidden costs often add $500-$1,500/month -- always include these in affordability calculations.

Should I buy at the top of what I qualify for?

No. Qualifying for the maximum is different from affording the maximum comfortably. Buying at the limit leaves no financial buffer for job loss, unexpected home repairs, or life changes. Most financial advisors recommend targeting 80-90% of your maximum qualification to maintain emergency fund flexibility and avoid feeling 'house poor.'

Home Affordability FAQ: Every Common Question Answered

Home affordability generates hundreds of questions from first-time and experienced buyers alike. This FAQ provides specific, current answers to every common question about how much house you can afford in 2025.

Overview

Home affordability quick answers

Common Question	Quick Answer
What is the 3x rule for home buying?	3x gross annual salary = affordable home price (very rough rule)
What monthly payment can I afford?	28% of gross monthly income for all housing costs (PITI)
How do other debts affect affordability?	Every $100/month in debt reduces your housing budget by $100/month
Does my credit score affect affordability?	Yes -- lower score means higher rate and potentially higher required down payment
What if I can’t afford 20% down?	3-5% conventional with PMI; 3.5% FHA; 0% VA/USDA for eligible buyers
When is the best time to buy?	When you are financially ready -- down payment, stable income, emergency fund maintained

🔑Affordability and Qualification Are Different Questions

Lender qualification uses DTI ratios to determine maximum loan amount. Comfortable affordability uses actual take-home pay and your specific life expenses. You should run both calculations -- the lender maximum and your personal comfortable maximum -- to find the right price range for your situation.

Key Points

Calculate affordability using take-home pay for the comfort check, gross income for the qualification check
Pre-approval tells you what you qualify for -- your personal budget tells you what you should spend
Property taxes and HOA fees are part of the housing payment -- always include them in affordability math
Closing costs are due at closing and separate from your down payment -- save for both
Maintain your emergency fund after buying -- the first year of ownership often includes unexpected costs

Calculate Your Home Affordability

Use the home affordability calculator to see your maximum home price based on your income, debts, down payment, and current mortgage rates.

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Home Affordability FAQ: Every Common Question Answered

Overview

Key Points

Calculate Your Home Affordability

Frequently Asked Questions

Frequently Asked Questions

More Home Affordability Guides

How to Use the Home Affordability Calculator: Complete Guide

The 28/36 Rule: How to Calculate Your Maximum Home Budget

How Much House You Can Afford at Every Income Level