How much house can I actually afford?
A lender decides what you qualify for using your gross income. You make the payment out of what is left after tax, retirement contributions and health premiums. Those are different numbers, and the distance between them is the reason approved buyers end up feeling broke.
The rule, and what it actually costs you
The lender convention is the 28/36 rule: housing takes no more than 28% of gross monthly income, and all debt including housing no more than 36%. Here is what 28% of gross buys, and what it leaves behind. Every payment is a full PITI figure from the mortgage calculator at 6.5% over 30 years with 20% down, and every take-home figure is the paycheck calculator on 2026 tax data.
| House | Real payment | Salary the 28% rule wants | Take-home a month | Payment as share of take-home | Left over |
|---|---|---|---|---|---|
| $250,000 | $1,618 | $69,343 | $4,135 | 39.1% | $2,517 |
| $300,000 | $1,917 | $82,157 | $4,812 | 39.8% | $2,895 |
| $350,000 | $2,216 | $94,971 | $5,463 | 40.6% | $3,247 |
| $400,000 | $2,514 | $107,748 | $6,112 | 41.1% | $3,598 |
| $500,000 | $3,112 | $133,371 | $7,411 | 42.0% | $4,299 |
The 28% rule is really a 39% to 42% rule. That is the single most useful fact on this page. A lender looking at a $107,748 salary sees a $2,514 payment as 28% of income and approves it comfortably. In your account, that payment is 41.1% of the $6,112 that actually arrives.
How the third column is built: it is the PITI figure divided by 0.28 and annualized, which is the salary at which a lender's 28% front-end limit exactly permits that payment. Take-home assumes a single filer, a 6% 401(k) contribution, $1,800 of health premiums and a 5% flat state rate. Change any of those and the percentages move, but the direction does not. Method on how it's checked.
Three things the gap is made of
1. It gets worse as you earn more
Read the percentage column downward: 39.1%, 39.8%, 40.6%, 41.1%, 42.0%. The squeeze tightens as income rises, because tax is progressive and a larger slice of each extra dollar goes to it. Earning more does not close the gap between what a lender will approve and what you can comfortably pay. It opens it slightly.
This runs against the intuition that higher earners have more slack. On a percentage basis they have marginally less, at least against a rule written in gross terms.
2. The quoted payment is not the payment
On the $400,000 house, principal and interest is $2,023. The actual monthly cost is $2,514, because property tax adds $367 and insurance $125. That is 24% more than the number a rate calculator shows you, and it is before any HOA fee.
Lenders call the real figure PITI: principal, interest, taxes and insurance. If you have been shopping using a monthly payment from a rate table, you have been shopping with a number roughly a quarter too low.
3. A smaller down payment costs more than the down payment
Same $400,000 house, three deposits:
| Down payment | Monthly payment | Of which PMI | Versus 20% down |
|---|---|---|---|
| 5% | $3,052 | $158 | +$538 a month |
| 10% | $2,917 | $150 | +$403 a month |
| 20% | $2,514 | none | baseline |
Buying the same house with 5% down rather than 20% costs $538 more every month. About $158 of that is private mortgage insurance, which protects the lender against your default and returns nothing to you. The rest is interest on a larger balance. PMI does fall away as you cross 20% equity, but in the meantime it is rent you pay for having a small deposit.
A better question than "what can I qualify for"
Look at the last column, not the first
The $400,000 row leaves $3,598 a month after housing. That is the number that decides whether you enjoy the house. Out of it come groceries, utilities, transport, insurance, childcare, any debt payments, saving for retirement, and the repairs that arrive the month you have no slack.
A common planning figure for maintenance is around 1% of the home's value a year, which on a $400,000 house is roughly $333 a month that appears in no mortgage quote. It does not arrive smoothly. It arrives as a water heater.
The back-end ratio is where a car payment does its damage
The 36% half of the rule covers all debt, not just housing. A $500 car payment does not just cost $500, it removes $500 from the housing budget the lender will approve, which at these rates is close to $80,000 of house. If you are planning to buy in the next couple of years, that is worth knowing before you finance a car.
The debt payoff calculator shows what clearing those balances first would do, and the guide on payoff order works through which to attack.
Buying is not automatically the better deal either
Everything above assumes you have decided to buy and are asking how much. Whether buying beats renting at all is a separate question, and closer than either side admits. The rent versus buy calculator compares the two on net worth over time, and on its defaults the two paths finish within a few thousand dollars of each other after a decade.
What these figures leave out
Costs that are real and missing
No closing costs, which commonly run a few percent of the price and are due in cash on top of the deposit. No HOA, which in some markets rivals the tax bill. No maintenance, as noted. The property tax and insurance figures are also held flat, when both generally rise every year, so the later payments in any 30-year projection are optimistic.
The mortgage interest deduction is excluded as well, which understates buying for the minority of households that still itemize. It only helps if your itemized deductions beat the standard deduction, and since that threshold rose, most do not.
The rule itself is a lender's risk tolerance, not your budget
28/36 exists to predict default, not to describe a comfortable life. It knows nothing about your childcare costs, your job security, whether you support family, or how much you want to save. A payment at 41% of take-home is survivable for someone with no other obligations and crushing for someone with three.
So use the table to translate a price into a real payment and a real remainder, then decide against your own spending rather than a lender's threshold. The budget builder is the right tool for that half, and the honest version of this question is not "what will they lend me" but "what will I still be able to do afterwards".
Common questions
How much house can I afford on my salary?
Lenders generally cap housing at 28% of gross income, which at 6.5% works out to between three and a half and four times your salary. On a $107,748 salary that is a $400,000 house with 20% down. The catch is that 28% of gross is 41% of take-home once tax and payroll deductions come out, so budget from the number that reaches your account rather than the one on your offer letter.
Why is the payment bigger than the mortgage calculator said?
Because most quotes show principal and interest only. On a $400,000 house with 20% down at 6.5%, principal and interest is $2,023 a month but the real payment is $2,514 once property tax and insurance are included. That is 24% more. Add HOA fees or private mortgage insurance and the gap grows further.
How much does a smaller down payment really cost?
On a $400,000 house, going from 20% down to 5% down raises the monthly payment from $2,514 to $3,052. That is $538 more every month, of which about $158 is private mortgage insurance, an expense that protects the lender rather than you. The rest is interest on the larger loan.
Why does the affordability gap get worse at higher incomes?
Because tax is progressive. At a $69,343 salary a 28% of gross payment eats 39.1% of take-home. At $133,371 the same 28% rule eats 42.0%, because a larger share of the extra income goes to tax. Earning more does not close the gap between what a lender approves and what you can comfortably pay. It widens it slightly.