How Much Mortgage Can I Afford? (2026 Guide and Examples)
Updated October 8, 2026
A common rule of thumb says your housing payment should be no more than 28% of your gross monthly income, and your total monthly debts should stay under 36%. This is the 28/36 rule. On an $80,000 income with $600 a month in other debts, that points to a mortgage of roughly $213,000, or a home price near $267,000 with 20% down.
Your own number depends on your income, debts, interest rate and down payment. This guide shows how lenders work it out, gives you an income table and walks you through a full example. To check your own figures, use our mortgage payment calculator.
How lenders decide how much you can borrow
Lenders mainly look at four things:
- Income: your gross (before tax) monthly income.
- Debts: car loans, student loans, credit cards and other monthly payments.
- Credit score: a higher score usually gets a lower rate.
- Down payment and savings: how much cash you bring and what you keep in reserve.
They compare your payments to your income using the debt-to-income ratio. You can work out yours with our debt-to-income calculator.
The 28/36 rule explained
- 28% front-end ratio: your total housing payment (principal, interest, property tax and insurance) should be at most 28% of gross monthly income.
- 36% back-end ratio: your housing payment plus all other monthly debts should be at most 36% of gross monthly income.
These are guidelines, not laws. Some loans allow higher ratios, often up to around 43% or more, depending on the loan type, your credit and the lender. Just because you can borrow more does not mean you should.
Full example: $80,000 income
Let us say you earn $80,000 a year, pay $600 a month toward a car and student loan, and plan to put 20% down.
- Gross monthly income: $80,000 / 12 = $6,667.
- 28% limit for housing: $6,667 x 0.28 = $1,867.
- 36% limit for all debts: $6,667 x 0.36 = $2,400. Subtract your $600 of other debts to get $1,800 for housing.
- The lower number wins, so your housing budget is $1,800 a month.
- Assume property tax and insurance cost $450 a month. That leaves $1,350 for principal and interest.
- At 6.5% over 30 years, each $100,000 borrowed costs about $632 a month. So $1,350 supports a loan of about $213,600.
- With a 20% down payment, you could look at homes up to about $267,000.
Notice how the $600 of other debt shrinks your budget. Paying off a car loan before you apply can raise what you can borrow.
How much mortgage can I afford by income?
This table uses the 28% rule with no other debts, 6.5% over 30 years, and assumes property tax and insurance take about 20% of the housing payment. Your real numbers will differ.
| Gross yearly income | Max housing payment (28%) | Estimated loan | Home price with 20% down |
|---|---|---|---|
| $50,000 | $1,167 | $147,700 | $184,600 |
| $60,000 | $1,400 | $177,200 | $221,500 |
| $80,000 | $1,867 | $236,300 | $295,300 |
| $100,000 | $2,333 | $295,300 | $369,200 |
| $120,000 | $2,800 | $354,400 | $443,000 |
Another simple rule of thumb is to aim for a home price of around 2.5 to 3 times your gross income. It is easy to remember, but it ignores your debts and interest rates, so treat it as a rough starting point only.
How the interest rate changes what you can afford
Rates have a big effect. Suppose you can spend $1,500 a month on principal and interest over 30 years:
| Interest rate | Loan you can afford |
|---|---|
| 5% | about $279,400 |
| 6% | about $250,200 |
| 7% | about $225,500 |
A 2-point rise in the rate cuts your borrowing power by roughly $54,000. This is why buyers watch rates closely, and why it pays to compare lenders. See what a specific loan costs in our guide to the monthly payment on a $300,000 mortgage.
Costs people forget
A mortgage payment is not the whole cost of owning a home. Plan for:
- Closing costs: often roughly 2% to 5% of the loan, paid when you buy.
- Mortgage insurance (PMI): often required on conventional loans with less than 20% down.
- Maintenance: many owners set aside around 1% of the home’s value each year for repairs.
- HOA fees and utilities: these vary a lot and are not in the payment.
- Emergency fund: keep several months of expenses in cash. Work out your target with the emergency fund calculator.
How much should your down payment be?
A bigger down payment lowers the loan, the monthly payment and often the rate, and can remove PMI. Many buyers put down less than 20%, but then the payment is higher. Use the down payment calculator to see how much cash each percentage needs.
Buying versus renting: a quick check
If you are unsure whether to buy, compare the total cost of owning with your rent. Our rent affordability calculator shows what a common 30% income guideline would allow for rent.
7 ways to increase how much mortgage you can afford
- Pay down or clear other debts, especially high-payment ones.
- Raise your credit score before applying.
- Save a larger down payment.
- Compare several lenders and loan types.
- Add a co-borrower with steady income, if appropriate.
- Choose a home with lower property tax and insurance costs.
- Wait and save if rates or prices make the payment too tight.
Planning to buy in the UK?
UK lenders usually work differently. Many offer around four to four and a half times your yearly income, then run affordability checks on your spending. Try our UK mortgage affordability calculator for an estimate.
Frequently asked questions
How much mortgage can I afford on $60,000 a year?
With the 28% rule, about $1,400 a month for housing, which supports a loan of roughly $177,000 at 6.5% over 30 years, depending on tax, insurance and other debts.
What is the 28/36 rule for mortgages?
Keep your housing payment to 28% or less of gross monthly income, and your total debts to 36% or less.
How much house can I afford with a $100,000 income?
Roughly $369,000 with 20% down, using the same assumptions as the table above. Your debts and local taxes can change this a lot.
Is it better to spend less than the maximum?
Often yes. A payment well below your limit leaves room for savings, repairs and life changes.
This article is for information only and is not mortgage or financial advice. Lenders set their own rules, and rates, taxes and insurance vary. Speak to a licensed lender or adviser before you borrow.