How much house can I afford?
Two numbers: what the lender will approve (28/36 DTI rule) and what won't make you house-poor (25% rule). Full PITI breakdown with PMI check.
Max = what a lender will qualify you for under standard 28/36 DTI. Recommended = what leaves room for retirement, emergencies, and a life. They differ by 20-30% for most buyers. Always make the buying decision against the recommended number, not the max.
The 28/36 rule, explained
The 28/36 rule is the conventional DTI standard lenders use to underwrite mortgages:
- Front-end (28%): Total housing costs (mortgage P&I + property tax + insurance + HOA + PMI) should be ≤ 28% of gross monthly income.
- Back-end (36%): All recurring debt (housing + car + student loans + minimum credit card payments) should be ≤ 36% of gross.
Conventional lenders sometimes stretch to 43% back-end with strong credit and reserves. FHA can go to 50% with compensating factors (large down payment, high credit score, significant reserves). Just because you can borrow more doesn't mean you should.
Why the lender's "max" is dangerous
Lender-max math assumes housing is your only major spending category. It ignores: retirement contributions (≥15% of gross is recommended), childcare ($1,500-3,000/month per kid in many metros), maintenance reserve (1% of home value annually), property tax increases, HOA special assessments, and any lifestyle spending. Buyers at lender-max typically have negative discretionary savings rates.
Quick income-to-house benchmarks (2026)
| Household income | Conservative (25% rule) | Stretch (lender max) |
|---|---|---|
| $75,000 | ~$200K home | ~$270K home |
| $100,000 | ~$275K home | ~$360K home |
| $150,000 | ~$425K home | ~$550K home |
| $200,000 | ~$580K home | ~$750K home |
| $300,000 | ~$900K home | ~$1.15M home |
Assumes 20% down, 6.5% rate, 1.1% property tax, $1,500 annual insurance, no HOA, no other monthly debts. Variations in any of those assumptions can shift the numbers ±15%.
What's not in the calculator
- Closing costs: 2-5% of home price, paid at signing. On $400K, that's $8-20K cash.
- Cash reserves: lenders want 2-6 months of PITI in liquid savings after closing for conventional loans.
- Maintenance: 1% of home value per year (varies — older homes need more).
- Property tax escalation: typical 2-5% per year; can spike on reassessment.
- HOA special assessments: ad-hoc charges for major building repairs, sometimes $5-50K.
- Utility cost: heating/cooling a 2,500 sqft home vs an apartment is a real expense step.
Related calculators
- Mortgage calculator — once you know the home price, see the actual P&I
- Mortgage payoff calculator — extra payments to crush interest
- Take-home pay calculator — what's actually arriving in your account