How Much House Can I Afford?

The bank will often approve you for more than you should actually spend. Here's how to find a number that keeps your life comfortable, not house-poor.

The 28/36 rule

The classic guideline lenders use:

• 28% — your total monthly housing payment (mortgage, taxes, insurance) should stay under 28% of your gross monthly income.
• 36% — all your debt payments combined (housing + car + student loans + credit cards) should stay under 36% of gross income.

On a $6,000/month gross income, that's roughly $1,680 for housing and $2,160 for all debt. Run your specific payment on the mortgage calculator to see where you land.

Don't forget the costs beyond the mortgage

The sticker payment isn't the real cost. Budget for property taxes, homeowners insurance, possible HOA fees, and ongoing maintenance (a common rule is ~1% of the home's value per year). These can add hundreds a month on top of principal and interest.

The down payment and your monthly number

A larger down payment lowers your loan, your monthly payment, and your total interest — and 20% down lets you skip private mortgage insurance (PMI). Saving that up is a goal in itself; map it out on the savings goal calculator.

Should you even buy right now?

If you might move within a few years, renting can actually be cheaper once you factor in closing and selling costs. Compare honestly with the rent vs buy calculator.

The smart-money rule of thumb

Just because you can afford the maximum doesn't mean you should. Buying below your limit leaves room to invest, build your emergency fund, and absorb surprises — that breathing room is what keeps a home a blessing instead of a burden.

Run your numbers