Home Affordability Calculator 2026: How Much House Can You Afford?
May 12, 20269 min readBy CalVerse
On an $80,000 salary with no debt, you can afford a home up to $340,000–$360,000. Add a $500/month car payment and that drops to $250,000–$270,000 — a $90,000 reduction in buying power from one monthly payment. Most first-time buyers discover this only after they're already in love with a house they can't qualify for. This guide shows you the exact numbers before that happens.
The Key Numbers — 2026
28%
Max Housing Costs
36%
Max Total Debt DTI
20%
Down to Avoid PMI
6.8%
30yr Avg Rate 2026
$100–300
PMI Cost Per Month
3.5%
FHA Min Down Payment
How Much House Can You Afford — By Salary
Assuming 20% down payment, no existing debt, 6.8% interest rate, 30-year mortgage, $3,600/year property tax and $1,800/year insurance. This is the clean baseline:
Annual Salary
Monthly Gross
Max Housing/mo (28%)
Max Home Price
Monthly Payment
$50,000
$4,167
$1,167
$155,000
$1,010/mo
$60,000
$5,000
$1,400
$200,000
$1,300/mo
$75,000
$6,250
$1,750
$265,000
$1,724/mo
$80,000
$6,667
$1,867
$285,000
$1,854/mo
$100,000
$8,333
$2,333
$370,000
$2,407/mo
$120,000
$10,000
$2,800
$455,000
$2,960/mo
$150,000
$12,500
$3,500
$585,000
$3,806/mo
Assumes 20% down, no debt, 6.8% rate, 30yr term. Includes estimated tax and insurance.
💡 The Real Rule of Thumb
A simple quick estimate: you can typically afford a home worth 3–4x your annual gross salary. On $80K that's $240K–$320K. On $120K that's $360K–$480K. This rough guide works well for people with little debt and standard down payments — but the 28/36 calculator gives you the precise number.
How Debt Destroys Your Home Buying Power
🏠 How Monthly Debt Kills Your Home Buying Power — 2026
Each $200/month in existing debt (car, student loan, credit card) erases ~$29,000 in home buying power.
This is the part most buyers discover too late. Every dollar of monthly debt payment reduces your maximum home price by roughly $15,000–$18,000. Here's exactly what common debt loads do to a $100,000 salary buyer:
$100,000 Salary — Impact of Existing Debt on Max Home Price
No existing debt$370,000 max home
$300/mo student loan$315,000 max home (-$55,000)
$500/mo car payment$280,000 max home (-$90,000)
$700/mo car + student loan$245,000 max home (-$125,000)
$1,000/mo total debt$190,000 max home (-$180,000)
A $700/month combined debt load costs this buyer $125,000 in home buying power. That's often the difference between a starter home in a good neighbourhood and a great home in the same neighbourhood. Paying off debts before buying is almost always worth it.
Calculate your exact max home price
Enter your salary, debts, down payment and rate — see your exact DTI, PMI status and full monthly breakdown.
📐 The 28/36 Rule: What Lenders Check on Every Mortgage Application
Front-end DTI (28%) covers just housing costs. Back-end DTI (36%) includes all monthly debt payments — the stricter limit lenders use.
Every conventional mortgage lender uses two DTI ratios to qualify you. Understanding both is essential:
Front-End DTI — The 28% Rule
Your total housing costs — Principal + Interest + Property Tax + Insurance + PMI + HOA — cannot exceed 28% of gross monthly income. On $8,333/month gross ($100K salary), the maximum housing payment is $2,333/month. This is the number the bank calculates first.
Back-End DTI — The 36% Rule
All monthly debt payments combined — housing PLUS car loans, student loans, credit cards, personal loans — cannot exceed 36% of gross income. On the same $100K salary, that's $3,000/month maximum total debt. If you already have $700/month in other debts, you only have $2,300/month left for housing — which cuts your max home price significantly.
⚠️ The DTI Limit That Actually Gets Used
While 36% is the traditional guideline, many lenders today approve up to 43% back-end DTI for conventional loans and up to 50% for FHA. However, approval at 43–50% DTI typically means higher interest rates, stricter income verification, and less room for error. Staying under 36% gives you the best rates and the easiest approval process.
PMI — The Hidden Cost That Changes Everything
If your down payment is below 20%, you pay Private Mortgage Insurance every month on top of your mortgage. PMI protects the lender — not you — and typically costs 0.5–1.5% of the loan amount annually. On a $300,000 loan that's $125–$375/month you're paying for zero benefit to yourself.
Loan Amount
PMI Rate
Monthly PMI
Annual PMI
Total PMI (7 yrs to 20%)
$200,000
0.5%
$83/mo
$1,000/yr
$7,000
$300,000
0.6%
$150/mo
$1,800/yr
$12,600
$400,000
0.7%
$233/mo
$2,800/yr
$19,600
$500,000
0.8%
$333/mo
$4,000/yr
$28,000
On a $400,000 loan with 10% down, PMI costs $233/month until you reach 20% equity — typically 7–9 years. That's $19,600 paid to the lender's insurance company before PMI is cancelled. This is why the 20% down target exists — it's not arbitrary, it's a hard cash saving.
Should You Buy Now or Save for 20% Down?
This is the most common dilemma for first-time buyers in 2026. Here's how to think through it:
Buy with 10% down if: home prices in your area are rising fast (holding cash loses money to appreciation), your PMI rate is low, and you have stable income growth
Wait for 20% if: the market is flat or falling, your PMI rate is high (above 0.8%), or you need 12+ months anyway to save — use that time to pay off debts too
FHA at 3.5% down if: credit score is 580–679, you need to buy now, and the area has affordable prices — FHA has its own mortgage insurance (MIP) which can be less than PMI
The maths: saving $50,000 more for down payment while paying $2,000/month rent for 2 years costs $48,000 in rent. The PMI you'd have paid is $4,000–$6,000. Saving is almost never worth it if you're in a hot market.
How Much House Can I Afford by Salary? (2026)
Annual Salary
Max Home Price
Monthly Payment
28% Rule Limit
$50,000
$175,000–$190,000
~$1,150/mo
$1,167/mo
$60,000
$210,000–$225,000
~$1,400/mo
$1,400/mo
$80,000
$285,000–$300,000
~$1,867/mo
$1,867/mo
$100,000
$355,000–$375,000
~$2,333/mo
$2,333/mo
$120,000
$425,000–$450,000
~$2,800/mo
$2,800/mo
$150,000
$530,000–$560,000
~$3,500/mo
$3,500/mo
Assumes 20% down payment, 6.8% interest rate, no existing debt, 30-year fixed mortgage. Includes estimated taxes and insurance.
Home Affordability — Frequently Asked Questions
How much house can I afford on $80,000 a year?
On $80,000/year with no debt and 20% down at 6.8% interest: maximum home price is approximately $285,000–$300,000. Monthly payment including taxes and insurance runs around $1,850–$2,000. If you have a $500/month car payment, your max drops to roughly $195,000–$215,000. The 28% rule says your maximum housing payment is $1,867/month on that salary — everything flows from that number.
Does the 28/36 rule include property tax and insurance?
Yes — the front-end 28% includes PITI: Principal, Interest, Taxes, and Insurance. This means your property tax and homeowner's insurance are counted as part of your housing cost against the 28% limit. HOA fees are also typically included. Many buyers calculate based on principal and interest alone and are surprised when taxes and insurance push them over the DTI limit.
Can I get approved with a higher DTI than 36%?
Yes — many lenders approve up to 43% back-end DTI for conventional loans and up to 50% for FHA loans. However, exceeding 36% typically means higher interest rates, stricter income documentation requirements, and often requires compensating factors like excellent credit (740+), large cash reserves, or significant assets. Staying under 36% gives you the most loan options at the best rates.
Should I pay off my car before buying a house?
If you can pay off your car within 12 months, it almost always makes sense to wait and pay it off first. A $450/month car payment reduces your max home price by $80,000–$90,000 — paying off the car and buying a more expensive home in the same market often means lower total monthly payments because the mortgage rate is far lower than any car loan rate. Run the numbers either way before deciding.
What is the minimum credit score to buy a house in 2026?
Conventional loans: 620 minimum, though 740+ gets the best rates. FHA loans: 580 with 3.5% down, or 500–579 with 10% down. VA loans: no official minimum but most VA lenders want 620+. USDA loans: 640 minimum typically. The credit score difference between 620 and 760 on a $300,000 mortgage can be $80–$150/month in interest — worth improving your score if you're below 700.
How much house can I afford on $60,000 salary?
On $60,000/year with no existing debt and 20% down at 6.8% interest, you can afford approximately $210,000–$225,000. Your maximum monthly housing payment under the 28% rule is $1,400/month. This includes principal, interest, property taxes, and insurance. With a $300/month car payment, your max drops to around $155,000–$170,000.
How much house can I afford on $100,000 salary?
On $100,000/year with no debt and 20% down at 6.8%, you can afford approximately $355,000–$375,000. Monthly payment including taxes and insurance runs $2,300–$2,500. The 28% rule caps your housing payment at $2,333/month. A $500/month car payment reduces your max home price by about $90,000 — bringing it down to $265,000–$285,000.
How much house can I afford on $70,000 a year?
On $70,000/year with no debt and 20% down at 6.8% interest, you can afford approximately $245,000–$265,000. Your 28% housing payment limit is $1,633/month gross. With $400/month in existing debt (car or student loans), your max drops to around $170,000–$185,000. A clean debt profile makes a dramatic difference at this income level.
How much house can I afford on $90,000 a year?
On $90,000/year with no debt and 20% down at 6.8% interest, you can afford approximately $320,000–$340,000. Your 28% monthly housing limit is $2,100. With $500/month in car and student loan payments, your max drops to about $230,000–$250,000. At this income level with no debt, you can comfortably afford homes in most mid-tier markets outside of high-cost cities like NYC, SF, or LA.
How much house can I afford on $130,000 a year?
On $130,000/year with no debt and 20% down at 6.8%, you can afford approximately $460,000–$490,000. Monthly housing limit under the 28% rule is $3,033/month. This puts most US markets within reach, including many suburbs of major cities. With a $600/month car payment, your max drops to around $380,000–$400,000.
How much house can I afford on $200,000 a year?
On $200,000/year with no debt and 20% down at 6.8%, you can afford approximately $710,000–$750,000. Monthly housing limit under 28% is $4,667/month. You typically qualify for jumbo loans at this income level (loans over $766,550 in most counties). With significant existing debt, max could drop to $550,000–$620,000.
Ready to Calculate Your Mortgage Payment?
Once you know your max home price, calculate your exact monthly payment — including taxes, insurance, and full amortization schedule.