How Much House Can I Afford on My Salary?

By Dr. Ahmed Mortuza Saleque · Updated November 10, 2026 · How we check our content

The short answer

A common lender rule caps housing costs at 28% of gross monthly income. On a $100,000 salary that is $2,333 a month, which supports a home of about $370,000 with 20% down at 6.5% for 30 years, once property tax and insurance are included. Other debts, a smaller down payment or a higher rate all lower the figure.

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Bar chart of the home price affordable on salaries from $50,000 to $200,000 under the 28 percent rule — Tap the image to enlarge it. Free to share with a link to this page.

The 28/36 rule

28%: your housing payment (loan principal and interest, property tax, homeowners insurance and any HOA dues) should stay at or under 28% of your gross monthly income.
36%: housing plus all other debt payments (car loans, student loans, credit cards) should stay at or under 36%.

Your budget is whichever limit is lower. Someone earning $100,000 has $8,333 a month gross: 28% is $2,333 and 36% is $3,000. With $900 a month of other debts, the 36% rule leaves only $2,100 for housing, so that becomes the limit. The house affordability calculator applies both rules.

Home price by salary

Assumes the 28% rule, no other debts, 20% down, a 30-year loan at 6.5%, and property tax plus insurance of 1.5% of the price a year.

Gross salary	Monthly housing budget	Home price	Loan amount
$50,000	$1,167	$185,000	$148,000
$75,000	$1,750	$277,000	$222,000
$100,000	$2,333	$370,000	$296,000
$125,000	$2,917	$462,000	$370,000
$150,000	$3,500	$555,000	$444,000
$200,000	$4,667	$740,000	$592,000

As a rule of thumb under these assumptions, the affordable price is about 3.7 times gross salary.

How the $100,000 figure is worked out

Monthly budget: $100,000 × 28% ÷ 12 = $2,333.
Each $1,000 borrowed at 6.5% over 30 years costs $6.32 a month.
With 20% down, the loan is 80% of the price, so principal and interest cost $5.06 a month per $1,000 of price.
Tax and insurance at 1.5% a year add $1.25 a month per $1,000 of price, for $6.31 in total.
Price = $2,333 ÷ $6.31 × 1,000 = about $370,000. The payment is $1,871 of principal and interest plus $462 of tax and insurance.

What moves the number most

$100,000 salary, other assumptions unchanged.

Interest rate	Affordable home price
5.5%	$403,000
6.5%	$370,000
7.5%	$341,000

One percentage point of interest changes the price you can afford by about 8%. The down payment matters too: below 20% you usually pay private mortgage insurance, which uses up part of the monthly budget. Property tax varies widely by area, so replace the 1.5% assumption with local figures in the mortgage calculator.

What lenders approve and what is comfortable

The 28/36 rule is a guideline. Some loan programmes approve higher ratios, but approval is not the same as comfort. Before fixing a budget, set aside money for closing costs (often 2% to 5% of the price), moving, repairs, and an emergency fund. This article explains the arithmetic; it is not personal financial advice.

Common questions

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

About $277,000 with 20% down at 6.5% for 30 years, using the 28% rule with no other debts and 1.5% a year for property tax and insurance.

What is the 28/36 rule?

A lender guideline: spend no more than 28% of gross monthly income on housing and no more than 36% on all debt payments together.

Does the 28% include property tax and insurance?

Yes. It covers principal, interest, property tax, homeowners insurance and any HOA dues or mortgage insurance.

How much do I need for a down payment?

20% avoids private mortgage insurance on a conventional loan, which is $74,000 on a $370,000 home. Many loans accept less, at the cost of a larger payment.

Calculators for this article

Sources

Consumer Financial Protection Bureau – Owning a home