Find out how much house you can afford with simple math. Learn the 28/36 rule, what lenders look at, and how to set a budget that fits your real life — not just the bank's number.
This is the question that starts everything.
You do not want to buy too little and wish you had aimed higher. You do not want to buy too much and feel the squeeze every month. The sweet spot is somewhere in the middle — and it is different for every person.
Here is how to find yours.
Lenders use a simple formula called the 28/36 rule to figure out what you can handle. Here is how it works:
The 28% rule: Your total housing payment (mortgage + taxes + insurance) should be no more than 28% of your gross monthly income (before taxes).
The 36% rule: All of your monthly debts combined (housing + car loans + student loans + credit cards) should stay under 36% of your gross monthly income.
Say you earn $5,000 per month before taxes.
| Rule | Calculation | Your Limit |
|---|---|---|
| 28% housing | $5,000 x 0.28 | $1,400/month for housing |
| 36% total debt | $5,000 x 0.36 | $1,800/month for all debts |
If you already pay $300/month for a car and $200/month for student loans, that leaves about $1,300/month for your mortgage payment.
This is a guideline — not a hard cutoff. Some loan programs allow higher ratios. But the 28/36 rule gives you a solid place to start.
Programs, rates, and terms subject to change. Subject to credit approval.
When you apply for a mortgage, lenders review four main things.
Lenders want steady, reliable income. They check pay stubs, W-2s, and tax returns. If you are self-employed, they may review bank statements or two years of tax returns.
More documented income means more borrowing power. But qualifying for more does not mean you should borrow more. (More on that in a minute.)
Lenders add up your monthly debt payments — car loans, student loans, credit cards, personal loans. Then they compare that total to your income.
This ratio is called your debt-to-income ratio (DTI). Lower is better. The less you owe each month, the more room you have for a mortgage payment.
Your credit score affects two things:
A higher score usually means a lower rate. A lower rate means a lower monthly payment — which means more home for the same monthly cost.
Not sure where your credit stands? That is okay. We review it together during your free planning session and show you exactly where you are. Visit our credit readiness page for tips to improve your score before you apply.
The more you put down, the less you borrow. A bigger down payment can also help you skip private mortgage insurance (PMI) and lower your monthly cost.
But you do not always need 20% down:
We help you find the right program for your situation. Subject to credit approval.
Here is the part that matters most — and the part almost everyone skips.
Do not just ask "How much can I borrow?" Ask "How much should I spend?"
A lender says you qualify for $350,000. But the lender does not know about:
The real question is: "How much can I pay each month and still live my life?"
I always say this: buy within your comfort zone, not at your maximum. Homeownership should feel good — not like a weight on your shoulders.
Try this exercise right now:
This gives you a number based on your real life — not just what the bank says you can handle.
Many financial experts suggest this shortcut:
You can typically afford a home priced at 3 to 4.5 times your annual household income.
| Annual Income | Estimated Home Price Range |
|---|---|
| $50,000 | $150,000 – $225,000 |
| $70,000 | $210,000 – $315,000 |
| $80,000 | $240,000 – $360,000 |
| $100,000 | $300,000 – $450,000 |
But this is only a starting point. Your real number depends on your debts, credit, down payment, and interest rate.
Your mortgage payment is not your only housing expense. Budget for these too:
These costs add up fast. Factor them in before you set your budget.
Calculators and rules of thumb are helpful. But the most accurate way to find out how much house you can afford is to sit down with a mortgage professional.
During a free planning session, we review your income, debts, credit, and savings together. Then we show you exactly what you qualify for — and help you decide what makes sense for your budget and your life.
We are a mortgage broker. That means we compare options from multiple lenders to find the right fit for you. Not just one option from one bank.
No cost. No obligation. No pressure.
Questions in Spanish? I have you covered. We offer full service in both English and Spanish.
You do not have to guess what you can afford. Let us show you the real numbers — and build a plan that fits your life.
Jexayra has spent 9 years guiding families through the mortgage process. She has helped over 50 families reach homeownership with an average close time of 21 days. Bilingual in English and Spanish, she believes every borrower deserves clarity, care, and excellence — siempre.
Learn more about Jexayra