# How Much House Can I Afford? 2026 Guide by Income and Down Payment *Your guide to making the right housing affordability decision.* By Opendoor Editorial Team | 2025-10-10 > Your guide to making the right housing affordability decision. **The quick answer:** Most financial experts suggest you can afford a home priced at roughly 3× to 5× your gross annual income — assuming manageable debt, a decent credit score, and at least a 5% down payment. Someone earning $100,000 a year, for example, could typically afford a home between $300,000 and $450,000. But "roughly" isn't good enough when you're making the biggest purchase of your life. Your actual number depends on your salary, existing debt, down payment savings, current mortgage rates, and a handful of other factors that shift the math significantly. This guide walks you through exactly how to calculate how much house you can afford based on your income — with real numbers, income-tier breakdowns, and the formulas lenders actually use. > **Want a faster answer?** Jump to our income-based affordability table below, or use Opendoor's home affordability calculator to get a personalized estimate in minutes. [Get your offer](#) ## Quick-Reference Affordability Table Use this table to get a ballpark estimate of how much house you can afford based on your salary. These ranges assume a mortgage interest rate of roughly 6.5%–7%, minimal existing debt, and a down payment between 5% and 20%. | **Annual Gross Income** | **Estimated Home Price (Low)** | **Estimated Home Price (High)** | | $50,000 | $150,000 | $225,000 | | $75,000 | $225,000 | $340,000 | | $100,000 | $300,000 | $450,000 | | $150,000 | $450,000 | $675,000 | *The low end assumes a 5% down payment and moderate debt. The high end assumes a 20% down payment and minimal debt. Your actual range will depend on your credit score, local property taxes, and current interest rates.* These numbers are a starting point — not a ceiling or a guarantee of approval. Keep reading to understand exactly how lenders arrive at these figures and how you can calculate a number tailored to your situation. ## How to Calculate How Much House You Can Afford Figuring out your home affordability isn't guesswork. Lenders follow a specific sequence of calculations, and you can run through the same steps at your kitchen table. Here's the process, broken into five straightforward steps. ### Step 1 — Start With Your Gross Annual Salary Everything begins with your gross income — that's your total earnings *before* taxes, retirement contributions, and other deductions. If you're buying with a partner, combine both incomes. **Example:** You earn $85,000 per year and your partner earns $65,000. Your combined gross annual income is $150,000, or $12,500 per month. Why gross and not net? Because lenders underwrite mortgages based on gross income. It's the universal benchmark, and it's the number you'll see referenced in every affordability formula. If your income is variable — commission-based, freelance, or seasonal — most lenders will average your last two years of tax returns to determine a stable annual figure. ### Step 2 — Apply the 28/36 Rule The **28/36 rule** is the most widely used affordability guideline in mortgage lending. According to the [Consumer Financial Protection Bureau](https://www.consumerfinance.gov/ask-cfpb/what-is-a-debt-to-income-ratio-en-1791/), it works like this: - **28% rule:** Your total monthly housing costs (mortgage principal, interest, property taxes, and insurance — often called PITI) should not exceed **28% of your gross monthly income**. - **36% rule:** Your total monthly debt payments — housing costs *plus* car loans, student loans, credit card minimums, and any other recurring debt — should stay below **36% of your gross monthly income**. **Worked example:** - Gross monthly income: $8,333 (that's $100,000/year ÷ 12) - Maximum housing payment (28%): **$2,333/month** - Maximum total debt payments (36%): **$3,000/month** - If you have $500/month in existing debt (car payment + student loans), your max housing payment drops to $2,500 under the 36% rule — but the 28% cap ($2,333) is the binding constraint here. The 28/36 rule gives you your **maximum monthly housing budget**. From there, you work backward to find the home price you can afford. ### Step 3 — Factor In Your Down Payment Your down payment directly affects two things: the size of the mortgage you need, and whether you'll pay private mortgage insurance (PMI). | **Down Payment %** | **Down Payment on $300,000 Home** | **Loan Amount** | **PMI Required?** | | 5% | $15,000 | $285,000 | Yes | | 10% | $30,000 | $270,000 | Yes | | 20% | $60,000 | $240,000 | No | A larger down payment means a smaller loan, which means a lower monthly payment — and potentially a higher-priced home within the same monthly budget. If you're still building your savings, our guide on [how much to save for a house down payment](https://www.opendoor.com/articles/how-much-to-save-for-house) breaks down realistic savings targets. Not sure whether a smaller down payment makes sense for your situation? Here's [whether 5% is enough for a down payment](https://www.opendoor.com/articles/briefs/is-5-percent-enough-down-payment) — including the trade-offs to consider. ### Step 4 — Account for Interest Rates Mortgage interest rates have an enormous impact on what you can afford. Even a 1% rate difference can shift your buying power by tens of thousands of dollars. Here's how much a $1,500/month principal-and-interest payment buys you at different rates on a 30-year fixed mortgage: | **Interest Rate** | **Approximate Home Price (with 10% down)** | | 5.5% | ~$293,000 | | 6.5% | ~$264,000 | | 7.5% | ~$238,000 | As of early 2026, average 30-year fixed mortgage rates hover in the mid-6% range, according to [Freddie Mac's Primary Mortgage Market Survey](https://www.freddiemac.com/pmms). Locking in a lower rate — through rate buydowns or improving your credit score before applying — can meaningfully expand your budget. ### Step 5 — Subtract Taxes, Insurance, PMI, and HOA Fees Your mortgage payment is only part of your monthly housing cost. Lenders include all of these when evaluating whether you meet the 28% threshold: - **Property taxes:** Average roughly 1.1% of home value per year nationwide, according to the [Tax Foundation](https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/), but vary dramatically by state. New Jersey homeowners pay over 2.2%, while Hawaii homeowners pay under 0.3%. - **Homeowners insurance:** Typically $1,200–$3,000+ per year depending on location, coverage level, and home value, according to the [Insurance Information Institute](https://www.iii.org/fact-statistic/facts-statistics-homeowners-and-renters-insurance). - **Private mortgage insurance (PMI):** Required if your down payment is less than 20%. PMI usually costs 0.5%–1.5% of the original loan amount per year. - **HOA fees:** If applicable, these can range from $100 to $700+ per month. **Why this matters:** On a $300,000 home, these additional costs could add $500–$1,000+ to your monthly housing expense. If you only budget for the mortgage payment itself, you'll overestimate what you can afford. Understanding the [full cost of buying a house](https://www.opendoor.com/articles/how-much-does-it-cost-to-buy-a-house) — beyond just the purchase price — is essential before you start shopping. ## How Much House Can I Afford Based on Income? (By Salary) One of the most common questions homebuyers ask is simply: *"I make $X per year — how much house can I afford?"* Below, we break down the math for four common income levels so you can see where you stand. All estimates below assume a 30-year fixed-rate mortgage at 6.75%, property taxes at 1.1%, homeowners insurance at $1,800/year, and minimal existing monthly debt ($200–$300). ### How Much House Can I Afford Making $50,000 a Year? On a $50,000 annual salary, your gross monthly income is approximately $4,167. Using the 28% rule, your maximum monthly housing payment would be about **$1,167**. | **Down Payment** | **Estimated Max Home Price** | **Estimated Monthly Payment** | | 5% ($7,500–$11,250) | $150,000–$170,000 | $1,050–$1,160 | | 10% ($15,000–$19,500) | $165,000–$195,000 | $1,050–$1,165 | | 20% ($36,000–$45,000) | $180,000–$225,000 | $1,050–$1,160 | At this income level, affordability is tightly constrained. Keeping existing debt low is critical — even $300/month in car or student loan payments will reduce your maximum home price by $30,000–$50,000. First-time buyer programs, such as FHA loans with 3.5% down payments, can help stretch your budget. ### How Much House Can I Afford Making $75,000 a Year? A $75,000 salary gives you roughly $6,250 in gross monthly income and a maximum housing payment of about **$1,750** under the 28% rule. | **Down Payment** | **Estimated Max Home Price** | **Estimated Monthly Payment** | | 5% ($11,250–$17,000) | $225,000–$260,000 | $1,580–$1,740 | | 10% ($24,000–$29,000) | $240,000–$290,000 | $1,580–$1,745 | | 20% ($52,000–$68,000) | $260,000–$340,000 | $1,560–$1,750 | This income puts you in reach of a solid starter home or condo in many markets. Focus on minimizing debt and maximizing your down payment to reach the higher end of the range. If you're exploring options, check out our guide on [open house tips for first-time buyers](https://www.opendoor.com/articles/open-house-tips-for-first-time-buyers). ### How Much House Can I Afford Making $100,000 a Year? At $100,000 per year, your gross monthly income is approximately $8,333, and your maximum housing payment under the 28% rule is about **$2,333**. | **Down Payment** | **Estimated Max Home Price** | **Estimated Monthly Payment** | | 5% ($15,000–$22,500) | $300,000–$350,000 | $2,100–$2,330 | | 10% ($33,000–$40,000) | $330,000–$400,000 | $2,100–$2,330 | | 20% ($72,000–$90,000) | $360,000–$450,000 | $2,100–$2,330 | A six-figure income opens up significantly more inventory in most U.S. housing markets. The key variable at this level is often the down payment — jumping from 5% to 20% down could add $60,000–$100,000 to the home price you can comfortably afford. ### How Much House Can I Afford Making $150,000 a Year? With a $150,000 annual salary, your gross monthly income is $12,500, and the 28% rule puts your maximum housing payment at roughly **$3,500**. | **Down Payment** | **Estimated Max Home Price** | **Estimated Monthly Payment** | | 5% ($22,500–$33,750) | $450,000–$520,000 | $3,150–$3,490 | | 10% ($50,000–$60,000) | $500,000–$600,000 | $3,200–$3,500 | | 20% ($108,000–$135,000) | $540,000–$675,000 | $3,150–$3,490 | At this income level, you're well-positioned for a spacious single-family home in most metro areas. Just remember that higher-priced homes often come with higher property taxes, insurance premiums, and potential HOA fees — so run the full-cost calculation, not just the mortgage payment. When you're ready to start making offers, here's [how to determine what to offer on a house](https://www.opendoor.com/articles/how-to-determine-what-to-offer-on-a-house) so you bid confidently. ## Key Factors That Affect Your Home Affordability Your income and down payment set the foundation, but several other factors can push your affordable home price up — or pull it down. ### Credit Score Your credit score directly influences the mortgage interest rate a lender will offer you. According to [FICO](https://www.myfico.com/credit-education/calculators/loan-savings-calculator/), borrowers with scores above 760 typically qualify for the lowest available rates, while scores below 620 may face rates 1.5%–2% higher — or struggle to qualify at all. That rate difference is real money. On a $300,000 mortgage, a borrower with a 760+ score paying 6.25% instead of 7.75% would save roughly **$320 per month** — or over $115,000 over the life of the loan. ### Debt-to-Income Ratio (DTI) Your DTI ratio is the percentage of your gross monthly income that goes toward debt payments. It's one of the most important numbers in your mortgage application. **How to calculate it:** 1. Add up all monthly debt payments (car loans, student loans, credit card minimums, personal loans) 2. Divide by your gross monthly income 3. Multiply by 100 **Example:** You earn $7,000/month gross and pay $350 for a car loan + $250 for student loans = $600 in monthly debt. - DTI (before housing): $600 ÷ $7,000 = **8.6%** - Under the 36% rule, you have 27.4% left for housing = **$1,918/month max** for mortgage, taxes, and insurance. Most conventional lenders prefer a total DTI (including your new housing payment) under 36%, though some will approve up to 43%–45% for borrowers with strong compensating factors. For more on terms lenders use during this process, check out our [real estate terms glossary](https://www.opendoor.com/articles/real-estate-terms-you-should-know). ### Down Payment Size As shown throughout this guide, a larger down payment increases your buying power in two ways: it reduces the loan amount (lowering monthly payments) and it can eliminate PMI (saving an additional 0.5%–1.5% of the loan amount annually). Even an extra $10,000 in down payment savings can expand your budget by $15,000–$25,000 in home purchase price. ### Current Mortgage Interest Rates Interest rates shift with broader economic conditions and Federal Reserve policy. In a rising-rate environment, your purchasing power shrinks — every quarter-point increase in rates reduces the home price you can afford by roughly 2.5%–3% for the same monthly payment. Conversely, when rates fall, your dollar goes further. Stay current on rate trends and consider getting pre-approved early to lock in a favorable rate. ### Property Taxes and Homeowners Insurance These vary widely by location. Property tax rates range from under 0.3% in Hawaii to over 2.2% in New Jersey, according to the [Tax Foundation](https://taxfoundation.org/data/all/state/property-taxes-by-state-county-2024/). On a $400,000 home, that's the difference between $1,200/year and $8,800/year — a swing of over $630/month. Homeowners insurance costs have also risen sharply in disaster-prone states. Always get local estimates before assuming a national average. Understanding the [factors that influence home value](https://www.opendoor.com/articles/factors-that-influence-home-value) in a given area can also help you gauge how much ongoing costs like taxes may change over time. ### Private Mortgage Insurance (PMI) If you put down less than 20%, most lenders require PMI. On a $300,000 loan, PMI might cost $125–$375 per month. The good news: PMI automatically cancels once you reach 20% equity in your home. Factor this temporary cost into your monthly budget if you're buying with a smaller down payment. ## Common Home Affordability Rules of Thumb Not everyone wants to run a spreadsheet. Here are three widely used shortcuts that can help you estimate affordability quickly. ### The 28/36 Rule **What it says:** Spend no more than 28% of gross monthly income on housing costs and no more than 36% on total debt (housing + all other debts). **Best for:** Getting a realistic, lender-aligned estimate. This is the closest shorthand to how banks actually evaluate you. ### The 3× to 5× Income Rule **What it says:** You can generally afford a home priced at 3 to 5 times your annual gross income. **Best for:** A fast ballpark when you're just starting to explore. The low end (3×) is conservative and assumes a smaller down payment or higher debt. The high end (5×) assumes 20% down, excellent credit, and low existing debt. **Example:** A household earning $90,000 per year could likely afford a home between $270,000 and $450,000. ### The 20% Down Payment Rule — Do You Really Need It? **What it says:** You should put 20% down to avoid PMI and get the best loan terms. **The reality:** According to the [National Association of Realtors' 2024 Profile of Home Buyers and Sellers](https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers), the typical first-time buyer puts down just **8%**, while repeat buyers average around 19%. Plenty of loan programs (FHA, VA, USDA, conventional 97) allow down payments as low as 0%–3.5%. Putting down 20% is ideal but far from required. If waiting to save 20% means delaying homeownership by years while home prices rise, a smaller down payment with PMI may actually be the smarter financial move. Here's our deeper dive into [how much you need to save for a down payment](https://www.opendoor.com/articles/how-much-to-save-for-house). ## Mistakes to Avoid When Estimating Home Affordability Even buyers who do the math sometimes get tripped up by overlooked costs. Watch out for these common pitfalls: - **Forgetting closing costs.** Buyers typically pay 2%–5% of the purchase price in [closing costs](https://www.opendoor.com/articles/how-much-are-closing-costs-for-seller) — appraisal fees, title insurance, lender fees, and more. On a $350,000 home, that's $7,000–$17,500 due at closing on top of your down payment. - **Ignoring maintenance and repair budgets.** A common guideline is to set aside 1%–2% of your home's value per year for upkeep. For a $300,000 home, that's $250–$500/month. Skipping this line item can lead to financial stress when the HVAC fails or the roof needs replacing. - **Only looking at the mortgage payment.** Your monthly housing cost includes principal, interest, property taxes, homeowners insurance, PMI (if applicable), and potentially HOA fees. The mortgage payment alone can be misleading by $500–$1,000+ per month. - **Not getting pre-approved first.** A pre-approval letter tells you exactly what a lender will offer based on your actual finances — not an online estimate. It also makes you a stronger buyer when you're ready to [make an offer on a house](https://www.opendoor.com/articles/how-to-determine-what-to-offer-on-a-house). Learn more about [how long it takes to buy a house](https://www.opendoor.com/articles/briefs/how-long-does-it-take-to-buy-a-house) once you're pre-approved. - **Stretching to the absolute maximum.** Just because a lender approves you for $400,000 doesn't mean you should spend $400,000. Leave room in your budget for savings, unexpected expenses, and life beyond your mortgage payment. - **Overlooking the home inspection.** An inspection can reveal costly issues that change the true cost of a home. Before you close, review our [home inspection checklist for buyers](https://www.opendoor.com/articles/home-inspection-checklist-for-buyers) to know what to expect. ## Frequently Asked Questions ### How much house can I afford on $50k a year? On a $50,000 annual salary, you can generally afford a home priced between $150,000 and $225,000, depending on your down payment, existing debt, credit score, and local property tax rates. Using the 28% rule, your maximum monthly housing payment would be roughly $1,167. ### What is the 28/36 rule? The 28/36 rule is a budgeting guideline used by most mortgage lenders. It recommends spending no more than 28% of your gross monthly income on total housing costs and no more than 36% on all debt payments combined (housing plus car loans, student loans, credit cards, etc.). ### How much should I spend on a house based on my salary? A common rule of thumb is to buy a home priced at 3 to 5 times your gross annual income. For a more precise figure, calculate 28% of your gross monthly income to find your maximum housing payment, then work backward to determine the home price that fits within that budget at current interest rates. ### Can I buy a house with student loan debt? Yes. Student loan debt affects your debt-to-income ratio, which may reduce the mortgage amount you qualify for, but it doesn't disqualify you. Lenders will factor your monthly student loan payment into the 36% total debt threshold. Paying down balances or refinancing to a lower monthly payment can improve your buying power. ### How much do I need for a down payment? It depends on the loan type. Conventional loans may require as little as 3%–5% down. FHA loans require 3.5% with a credit score of 580 or higher. VA and USDA loans offer 0% down payment options for eligible borrowers. While 20% down eliminates PMI, [most first-time buyers put down far less](https://www.opendoor.com/articles/how-much-to-save-for-house). ### Does credit score affect how much house I can afford? Absolutely. A higher credit score qualifies you for lower mortgage interest rates, which directly increases the home price you can afford for the same monthly payment. A score difference of 100 points could mean a rate difference of 0.5%–1.5%, potentially shifting your buying power by $30,000–$75,000 or more. ### What's the difference between what I can afford and what a lender approves? Lenders calculate your maximum loan amount based on your income, debt, and credit — but they don't account for your personal savings goals, childcare costs, lifestyle expenses, or comfort level. Most financial advisors recommend targeting a payment that feels manageable, not just the maximum you're approved for. ### How do interest rates affect how much house I can afford? Significantly. For every 1% increase in mortgage rates, your purchasing power drops roughly 10%. For example, if you could afford a $350,000 home at 6%, the same monthly payment would only cover about $315,000 at 7%. Monitoring rate trends and getting pre-approved at the right time can make a meaningful difference. [Get your offer](#) ## Next Steps — Find Homes in Your Budget Now that you have a clear picture of how much house you can afford based on your salary, it's time to take action: - **Get a personalized home value estimate.** If you currently own a home and are thinking about selling before buying, find out [what your current home is worth](https://www.opendoor.com/articles/how-much-is-my-house-worth-7-ways-to-find-out-your-homes-value) to understand your equity position. - **Explore homes for sale on Opendoor.** Browse listings in your price range, tour homes on your schedule, and buy with confidence. - **Understand the full buying process.** From pre-approval to closing day, here's [how long it takes to buy a house](https://www.opendoor.com/articles/briefs/how-long-does-it-take-to-buy-a-house) so you can plan your timeline. - **Selling first?** Learn [how to sell your house fast](https://www.opendoor.com/articles/how-to-sell-your-house-fast-complete-guide) or compare [selling to Opendoor vs. a traditional home sale](https://www.opendoor.com/articles/how-selling-to-opendoor-compares-to-a-traditional-home-sale) to see which path makes sense for you. The best time to start is when you have a number you trust. Now you do. --- *Originally published at [https://www.opendoor.com/articles/how-much-house-can-I-afford-guide](https://www.opendoor.com/articles/how-much-house-can-I-afford-guide)*