How much house can I afford with $120,000 income?

Using the 28/36 rule: conservative target $425,000 (28% of gross to housing only), aggressive ceiling $455,000 (36% to total debt). Recommended middle: $440,000 — leaves room for emergencies and lifestyle.

What's the monthly payment at this price?

At $440,000 home price with 20% down ($88,000) at 7% for 30 years: PITI is $2,892/month. Breakdown: P&I $2,342, taxes $367, insurance $183.

What's my debt-to-income (DTI) ratio?

Housing DTI: 29% (target <28%). Total DTI: 35% (target <36%). Most lenders cap DTI at 36-43% depending on loan type. FHA allows up to 50% in some cases; conventional is stricter.

Is this realistic in today's market?

In 2026, US median home price is ~$420K and 30-year mortgage rates hover 6.5-7.5%. The $440,000 target above assumes 7% rate. In high-cost-of-living markets (Bay Area, NYC, Boston), the same income buys ~30-40% less. In low-COL areas (Midwest, Sun Belt suburbs), the same income often buys MORE than the 28/36 rule suggests.

Affordability scenario · Verified 2026-05-27

How much house can I buy with $100,000 down?

Recommended home price: $440,000 using the 28/36 rule. Conservative ceiling: $425,000. Aggressive ceiling: $455,000. Monthly PITI at recommended: $2,892 (29% of gross income).

Recommended price

$440,000

Monthly PITI

$2,892

Down payment

$88,000

Housing DTI

29%

Monthly cost breakdown at $440,000

Component	Monthly	Annual
Principal & interest	$2,342	$28,104
Property tax (1% assumed)	$367	$4,404
Homeowners insurance (0.5%)	$183	$2,196
Total PITI	$2,892	$34,704

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The 28/36 rule explained

Standard lender affordability rule used by most US mortgage underwriters:

28%: Housing payment (PITI) should not exceed 28% of gross monthly income. For $120,000 income, that's $2,800/month max.
36%: Total debt payments (housing + car loan + student loans + credit card minimums) should not exceed 36% of gross income. For your scenario: $3,600 − $600 existing debt = $3,000 available for housing.
Below 28%/36% gives you breathing room. Above signals stress.

Related affordability scenarios

How much house can I buy with $20,000 down?

→ Recommended $225,000 · PITI $1,828/mo

How much house can I buy with $50,000 down?

→ Recommended $280,000 · PITI $2,174/mo

Full interactive calculator

How much house can I afford

Plug in your specific income, debts, down payment, and rate to get a personalized recommendation. Includes opportunity cost analysis (buy vs invest the difference).

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Educational tool. Assumes property tax 1% and insurance 0.5% of home value annually (national averages — your state may differ). Math validated against Fannie Mae and Zillow affordability calculators. Verified 2026-05-27.