The question "how much house can I afford?" is the starting point of every home search. But generic answers are unhelpful — what you can afford on a $70,000 salary is fundamentally different from what you can afford on $150,000. Your income determines the maximum mortgage payment a lender will approve, which in turn determines the maximum home price you can target.
This guide breaks down affordability at every major salary level using the 28/36 rule that mortgage lenders apply, calculated with mid-2026 mortgage rates.
How Lenders Determine What You Can Afford
Most mortgage lenders use the 28/36 rule, as defined by Fannie Mae and the Consumer Financial Protection Bureau (CFPB):
**Front-end ratio (28%)**: Your total monthly housing costs — mortgage principal, interest, property taxes, homeowners insurance, and HOA fees — should not exceed 28% of your gross monthly income.
**Back-end ratio (36%)**: Your total monthly debt payments — housing costs plus car loans, student loans, credit card minimums, and other obligations — should not exceed 36% of your gross monthly income.
The lower of these two calculations determines your maximum approved monthly payment, which translates to a maximum home price.
All calculations below assume: 30-year fixed mortgage at 6.5%, 20% down payment, 1.1% annual property tax rate, $1,200 annual homeowners insurance, no HOA, and zero existing debt. Your actual affordability will differ based on your debt load, credit score, down payment amount, and local tax rates. Use our affordability calculator for a personalized estimate.
$50,000 Annual Salary
**Gross monthly income**: $4,167. **Maximum housing payment (28%)**: $1,167.
After subtracting estimated property taxes ($193/month) and insurance ($100/month), approximately $874 is available for principal and interest. At 6.5% for 30 years, this supports a loan of approximately $138,000.
**Maximum home price with 20% down**: approximately $173,000.
At this salary level, affordable homes exist primarily in rural areas, smaller cities, and lower-cost states. Markets like Indianapolis, Memphis, Oklahoma City, and many towns throughout the Midwest and South have median home prices in this range. With an FHA loan at 3.5% down, your maximum price drops slightly due to the added mortgage insurance cost.
$70,000 Annual Salary
**Gross monthly income**: $5,833. **Maximum housing payment (28%)**: $1,633.
After property taxes ($272/month) and insurance ($100/month), approximately $1,261 is available for P&I. This supports a loan of approximately $200,000.
**Maximum home price with 20% down**: approximately $250,000.
This opens up options in mid-tier markets like San Antonio, Columbus OH, Charlotte NC, and the suburbs of many major metro areas. A $250,000 budget covers a solid starter home in most of the country outside the coasts and major cities.
$80,000 Annual Salary
**Gross monthly income**: $6,667. **Maximum housing payment (28%)**: $1,867.
After taxes ($313/month) and insurance ($100/month), approximately $1,454 for P&I. Loan amount: approximately $230,500.
**Maximum home price with 20% down**: approximately $288,000.
$90,000 Annual Salary
**Gross monthly income**: $7,500. **Maximum housing payment (28%)**: $2,100.
Run the numbers for your situation: Use our free home affordability calculator to find out how much house you can afford based on your income and debts.
After taxes ($352/month) and insurance ($100/month), approximately $1,648 for P&I. Loan amount: approximately $261,000.
**Maximum home price with 20% down**: approximately $326,000.
At this salary, you can comfortably afford the national median home price. According to the National Association of Realtors, the median existing-home sales price was approximately $407,500 in late 2025, but this figure is skewed by high-cost markets. The median in affordable markets is significantly lower.
$100,000 Annual Salary
**Gross monthly income**: $8,333. **Maximum housing payment (28%)**: $2,333.
After taxes ($390/month) and insurance ($100/month), approximately $1,843 for P&I. Loan amount: approximately $292,000.
**Maximum home price with 20% down**: approximately $365,000.
A $100,000 salary is a common benchmark that opens up substantial options in most markets outside of San Francisco, New York City, Boston, and other ultra-high-cost areas. In cities like Denver, Nashville, Austin, and Portland, $365,000 buys a quality home in many neighborhoods.
$120,000 Annual Salary
**Gross monthly income**: $10,000. **Maximum housing payment (28%)**: $2,800.
After taxes ($470/month) and insurance ($125/month), approximately $2,205 for P&I. Loan amount: approximately $349,500.
**Maximum home price with 20% down**: approximately $437,000.
This salary level provides comfortable access to the median-priced home in most major metropolitan areas. The additional breathing room allows you to handle property taxes in higher-tax states without feeling stretched.
$150,000 Annual Salary
**Gross monthly income**: $12,500. **Maximum housing payment (28%)**: $3,500.
After taxes ($588/month) and insurance ($150/month), approximately $2,762 for P&I. Loan amount: approximately $437,800.
**Maximum home price with 20% down**: approximately $547,000.
At $150,000, nearly every market in the country except San Francisco, Manhattan, and parts of LA and Boston becomes affordable. This is also the salary level where many buyers start considering 15-year mortgages instead of 30-year, since the higher payment is manageable.
$200,000 Annual Salary
**Gross monthly income**: $16,667. **Maximum housing payment (28%)**: $4,667.
After taxes ($783/month) and insurance ($175/month), approximately $3,709 for P&I. Loan amount: approximately $587,800.
**Maximum home price with 20% down**: approximately $735,000.
This salary opens access to high-cost markets and allows considerable choice even in expensive cities. At this level, the mortgage interest deduction becomes more beneficial since total itemized deductions are more likely to exceed the standard deduction.
What Existing Debt Does to Your Buying Power
The calculations above assume zero existing debt. In reality, most buyers have car payments, student loans, or credit card balances. Here is how common debt amounts affect the $100,000 salary scenario:
**$0 monthly debt**: Maximum home price $365,000 (baseline)
**$300/month debt** (car payment): Maximum home price drops to approximately $317,000 — a $48,000 reduction. The back-end ratio (36%) becomes the limiting factor instead of the front-end ratio.
**$600/month debt** (car + student loans): Maximum home price drops to approximately $270,000 — a $95,000 reduction.
**$1,000/month debt** (car + student loans + credit cards): Maximum home price drops to approximately $207,000 — a $158,000 reduction.
This is why financial advisors recommend paying down debt before buying a home. Every $100 in monthly debt you eliminate adds approximately $16,000 to your home buying power. Use our DTI calculator to see how your specific debts affect your qualifying ratios.
Beyond the 28/36 Rule: What You Can Comfortably Afford
Qualifying for a mortgage and comfortably affording one are different things. The 28/36 rule represents the maximum most lenders will approve, not necessarily what you should spend. Many financial experts recommend targeting 20-25% of gross income on housing rather than 28%, leaving more room for retirement savings, emergency funds, and lifestyle expenses.
On a $100,000 salary, 25% of gross income is $2,083/month for housing — which supports a maximum home price of approximately $310,000 rather than $365,000. The $55,000 difference in home price translates to about $250 less per month in housing costs, which can be directed toward retirement accounts or other financial goals.
Consider your complete financial picture: retirement contributions, insurance premiums, childcare costs, and lifestyle preferences all affect how much you should allocate to housing. A mortgage payment that passes the 28/36 test but leaves no room for saving is not truly affordable.