Home › Guides › How Much House Can I Afford?
How Much House Can I Afford?
A realistic home budget comes down to your income, your existing debts, your down payment, and the interest rate. Here's how lenders turn those into a number — and how to estimate yours.
The 28/43 rule
Most lenders use two guardrails. The first says your monthly housing payment should stay around 28% of your gross (pre-tax) monthly income. The second says your total monthly debts — housing plus car, student, and credit-card payments — should stay under about 43%. Whichever produces the lower number tends to set your ceiling.
What "the payment" actually includes
The monthly payment lenders count isn't just loan principal and interest. It also includes property taxes, homeowners insurance, and — if you put down less than 20% — private mortgage insurance (PMI), plus any HOA dues. A common rule of thumb is to reserve roughly 20% of your housing budget for taxes, insurance, and PMI, leaving the rest for principal and interest.
How down payment changes the picture
Your down payment does two things: it reduces the amount you borrow and, once you reach 20%, removes PMI. A larger down payment can meaningfully raise the price you can afford for the same monthly payment — but don't drain every dollar; keep a cushion for closing costs and emergencies.
How interest rates change the picture
Rates move constantly, and even a one-point difference noticeably changes your monthly payment and the price you can support. That's why a "how much can I afford" figure is always an estimate tied to today's rate — treat it as a range, not a promise.
Estimate your number
You can approximate it by hand: take your gross monthly income, multiply by 0.28 for a housing-payment ceiling, subtract taxes/insurance, then work backward to a loan amount at current rates. Or let a calculator do it — the What Can I Afford calculator on MortgageReadyCheck pre-fills from a few quick inputs and lets you slide income, debt, down payment, and rate to see the effect instantly. Remember it's an estimate for planning, not a pre-approval.
See where you stand in about 2 minutes. Our free quiz scores your credit, income, savings, debt, and documents, then shows exactly what to improve — no signup wall to start, no credit check.
Take the free readiness quiz →Frequently asked questions
What income do I need to afford a house?
There's no single number — it depends on the home price, your other debts, your down payment, and the interest rate. The 28/43 rule ties affordability to your income and existing debt rather than a fixed salary threshold.
Is the affordability calculator a real approved amount?
No. It's an educational estimate based on the information you enter and general assumptions. Your actual borrowing power is determined by a lender after reviewing your full application.
Should I borrow the maximum I qualify for?
Not necessarily. Qualifying for an amount and comfortably affording it are different. Many buyers deliberately choose a payment below their maximum to leave room for savings, maintenance, and life changes.