How much house can I afford? A simple, honest answer

The amount a lender will approve and the amount you can comfortably afford are two very different numbers. Approval is based on ratios; comfort is based on your actual life. Here's how to find the price that won't keep you up at night.

The 28/36 rule

The most widely used guideline is the 28/36 rule:

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

On a $7,000/month gross income, that's about $1,960 for housing and $2,520 for all debt combined. These aren't laws, but they're a sane starting point that lenders broadly echo.

What actually goes into the payment

A mortgage payment is more than principal and interest. The full monthly cost includes:

• Principal & interest: the loan itself
• Property taxes: vary widely by location
• Homeowners insurance
• PMI: if your down payment is under 20%
• HOA fees: for some properties

It's easy to budget for the loan and forget the rest. Use the Mortgage Calculator to see the all-in monthly payment, including taxes, insurance, and PMI, not just principal and interest.

The down payment changes everything

A larger down payment lowers your loan amount, your monthly payment, and can eliminate PMI at 20%. It also affects how much home you can buy at a given monthly budget. Before fixing on a price, model a few down-payment scenarios, the difference in monthly cost is often larger than buyers expect.

Don't forget the hidden costs of owning

Affordability isn't just the mortgage. Budget for:

• Maintenance and repairs (a common rule: ~1% of home value per year)
• Higher utility bills than renting
• Furnishing and moving costs
• An emergency fund that survives a surprise

A house that's affordable on paper but leaves no cushion isn't actually affordable.

How to find your number

1. Calculate 28% of your gross monthly income, that's your target housing payment.
2. Work backward to a price using the Mortgage Calculator, adjusting the down payment and rate.
3. Subtract a margin for maintenance and life, aim to spend below the maximum, not at it.
4. Confirm total debt stays under 36% of income.

The bottom line

You can probably afford less than a lender will approve, and that's a good thing. Target around 28% of gross income for housing, model the full payment (taxes, insurance, PMI included) in the Mortgage Calculator, and leave room for the costs of actually owning a home. The goal isn't the biggest house you qualify for; it's the one you can live in comfortably.