If you’re staring at a mortgage calculator and wondering how much house you can actually afford, you’re not alone. The 28/36 rule is a common guideline: housing costs should not exceed 28% of your gross monthly income, according to U.S. Bank. But the answer depends on your income, debt, and down payment — and there’s a big difference between qualifying for a loan and actually affording the payments.

4 related posts

Maximum debt-to-income ratio for conventional loans: 43% ·
Minimum down payment for FHA loans: 3.5% ·
Common affordability rule (multiple of annual income): 2.5 to 4 times ·
Median U.S. home price (2024): $417,000

Quick snapshot

1Confirmed facts
2What’s unclear
  • Exact interest rates vary daily (NerdWallet).
  • Lender-specific overlays may differ (LendingTree).
  • Some lenders accept total DTI up to 45% depending on borrower profile (LendingTree).
3Down payment impact
  • A larger down payment can reduce the loan amount and improve affordability metrics (KEMBA Financial Credit Union).
  • Lenders often prefer an 80% loan-to-value ratio, which corresponds to a 20% down payment (Regions Bank).
4Monthly payment affordability
  • Housing costs should not exceed 28% of gross monthly income (U.S. Bank).
  • Monthly payment includes principal, interest, taxes, and insurance (Bankrate).

Here are the key numbers lenders use, drawn from underwriting guidelines and industry calculators.

Factor Value
Maximum DTI for conventional loans 43% (Bank of America)
Front-end DTI target (housing only) 28% (MortgageCalculator.org)
Back-end DTI target (total debt) 36% (NerdWallet)
FHA minimum down payment 3.5% (National Mortgage Center)
Conventional minimum down payment 3% (National Mortgage Center)
Debt types included in DTI Credit cards, auto loans, student loans, minimum payments (KEMBA Financial Credit Union)

The implication: your total debt load is as important as your income. Even a high salary won’t help if your monthly payments exceed the 36% back-end ratio.

I make $70,000 a year how much house can I afford?

With a $70k salary, the 28/36 rule gives you a monthly housing budget of $1,633 (28% of $5,833 gross) and total debt cap of $2,100. Using a 30-year fixed mortgage at 6.5% with a 20% down payment, that translates to a home price range of roughly $220,000 to $280,000, depending on taxes and insurance (U.S. Bank).

The trade-off

A $70k earner with a 20% down payment can afford about $280,000. But if you have $500 in monthly car and student loan payments, your back-end DTI jumps to 43% — the lender’s ceiling — and your affordable home price drops to $230,000.

How much house can I afford if I make $45,000 a year?

At $45k ($3,750/month gross), 28% gives you $1,050 for housing. With a 20% down payment and 6.5% rate, that supports a home price around $140,000–$160,000 (Bankrate). An FHA loan with 3.5% down might slightly increase the range, but you’ll add mortgage insurance.

If I make $90,000 a year?

Gross monthly income of $7,500 means a housing budget of $2,100. With 20% down, you’re looking at $320,000–$380,000. That’s enough for a median-price home in many markets (Regions Bank).

How much house can I afford if I make $135,000 a year?

Your monthly housing ceiling is $3,150. At 20% down, you can afford a home in the $480,000–$550,000 range. That puts you above the national median and opens up options in higher-cost markets (NerdWallet).

The pattern: each $10,000 of income adds roughly $25,000–$30,000 in buying power, assuming a 20% down payment and no other debt. Existing debt shrinks that number fast.

The catch for income-based buyers: A $70,000 earner should target $220,000–$280,000, but any existing debt above $467 per month pushes the DTI past the 36% safety zone, forcing a lower home price.

What is a home affordability calculator based on income?

These calculators use your income, debt, down payment, interest rate, and local taxes to estimate a safe home price. They are built on the same underwriting formulas lenders use (U.S. Bank).

How to use a home affordability calculator?

  1. Enter your gross annual income — the calculator multiplies by 0.28 to get your monthly housing budget (Zillow).
  2. Add your monthly debt payments — credit cards, car loans, student loans, child support. The calculator subtracts these from the 36% back-end ceiling (KEMBA Financial Credit Union).
  3. Set your down payment — 20% avoids PMI, but 3%–5% is possible. The calculator adjusts the loan amount accordingly (Regions Bank).
  4. Adjust the interest rate — use the current 30-year fixed rate (around 6.5% as of May 2025). A 0.5% change shifts your max price by about $15,000 (Bankrate).
  5. Include property taxes and insurance — these vary by location and can add $200–$500/month. The calculator factors them into the 28% cap (NerdWallet).

The catch: the calculator gives a number, but your actual comfort level depends on your lifestyle. A $1,800 monthly payment might be fine on paper but painful if you have other goals.

What inputs do you need?

  • Gross annual income (U.S. Bank)
  • Monthly debt payments (minimums only) (Zillow)
  • Down payment amount (National Mortgage Center)
  • Interest rate and loan term (Bankrate)
  • Estimated property taxes and insurance (NerdWallet)

How much loan can I qualify for?

Qualification is not just about income — lenders evaluate your debt-to-income ratio and credit score to set the maximum loan amount.

What is debt-to-income ratio?

DTI is calculated by dividing your total monthly debt payments by your gross monthly income (Zillow). Lenders use two versions: front-end (housing only) and back-end (all debt). The 43% back-end DTI is the typical ceiling for conventional loans (Bank of America).

Why this matters

If your DTI is 38%, you can still qualify for a conventional loan. But if it’s 44%, you’ll need an FHA loan or a compensating factor like a larger down payment (PrimeLending).

How does credit score affect loan qualification?

Conventional loans typically require a minimum credit score of 620, while FHA loans allow scores as low as 580 with a 3.5% down payment (National Mortgage Center). A higher score can lower your interest rate, which increases buying power.

What pre-approval process looks like

Pre-approval involves submitting pay stubs, tax returns, bank statements, and a credit check. The lender then issues a letter stating the maximum loan amount you qualify for. This step also confirms your income and debt numbers (LendingTree).

The takeaway: a pre-approval gives you a hard number, but it’s not a guarantee — rates and property values can change before closing.

How to Use a Home Affordability Calculator (Step-by-Step Guide)

  1. Open a free calculator — Use one from U.S. Bank or NerdWallet.
  2. Enter your gross annual income — e.g., $70,000.
  3. Add your monthly debt payments — include car loans, student loans, credit card minimums.
  4. Set your down payment — try 20% for a baseline, then adjust to see the impact.
  5. Input an interest rate — use 6.5% for a current estimate.
  6. Add property tax and insurance estimates — use 1.2% of the home price for taxes and $100/month for insurance.
  7. Read the result — the calculator shows your maximum home price and monthly payment. Adjust variables to see trade-offs.

Why this matters: a $10,000 change in down payment or a 0.5% rate shift can change your affordable home price by $15,000–$20,000. Play with the numbers before you start house hunting.

What’s clear and what’s not

Confirmed facts
  • Maximum DTI for conventional loans is 43% (Bank of America)
  • The 28/36 rule is a common guideline (U.S. Bank)
  • FHA loans allow down payments as low as 3.5% (National Mortgage Center)
What’s unclear
  • Exact interest rates vary daily (NerdWallet)
  • Lender-specific overlays may differ (LendingTree)
  • Some lenders accept total DTI up to 45% (LendingTree)

Perspectives from the industry

Your monthly housing costs – including principal, interest, taxes, and insurance – should not exceed 28% of your gross monthly income.

Consumer Financial Protection Bureau (CFPB)

The 28/36 rule is a standard guide for mortgage affordability. It helps you understand how much house you can afford based on your income and debt.

Freddie Mac

For a buyer earning $70,000, the CFPB’s 28% rule means a housing budget of $1,633 per month. Freddie Mac’s rule reinforces that total debt should stay under 36% ($2,100). The gap between housing and total debt — $467 — is your buffer for other monthly obligations. If your car loan takes $400, you’re nearly at the ceiling.

Additional sources

fidelity.com

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Frequently asked questions

What is the difference between pre-qualification and pre-approval?

Pre-qualification is a quick estimate based on self-reported information. Pre-approval involves a lender verifying your income, assets, and credit, and gives you a firm loan amount. Pre-approval is stronger when making an offer (LendingTree).

How does student loan debt affect affordability?

Student loan payments are included in your DTI. Even if you’re on an income-driven plan, the lender typically uses the minimum payment listed on your credit report. That payment reduces the amount you can allocate to a mortgage (KEMBA Financial Credit Union).

Should I use a mortgage broker or a bank?

Brokers shop multiple lenders to find the best rate and terms; banks offer their own products. Both can pre-approve you. A broker may be useful if you have a complex financial situation (NerdWallet).

How often should I check my credit score before buying a house?

Check it at least six months before applying. This gives you time to correct errors and improve your score. A higher score can lower your mortgage rate by 0.5% or more, which translates to thousands in savings (Bankrate).

What is private mortgage insurance (PMI) and how long do I pay it?

PMI is required on conventional loans with a down payment below 20%. It protects the lender if you default. You can request to cancel PMI once your loan-to-value ratio reaches 80%, and it automatically ends at 78% LTV (Regions Bank).

Can I afford a house if I have a car loan?

Yes, but the car payment increases your DTI. For example, a $400 monthly car payment reduces your affordable home price by about $50,000 compared to having no car debt (Zillow).

How do property taxes vary by location and impact my budget?

Property taxes range from under 0.5% to over 2% of the home value. In a high-tax area, a $300,000 home could have $6,000/year in taxes, adding $500/month to your housing cost. That directly reduces the principal you can afford (U.S. Bank).

Related reading

For a buyer making $70,000, the choice is clear: either keep your other debts low and aim for a $280,000 home, or stretch to a higher DTI and accept a tighter monthly budget. The numbers don’t lie — use a calculator, check your credit, and get pre-approved before you start looking.