How much mortgage can I afford?

A good rule of thumb is the 28/36 rule:

• Housing costs (principal, interest, taxes, and insurance) should be no more than 28% of your gross monthly income.
• Total monthly debt payments should be no more than 36% of your gross monthly income.

Quick example

If you make $100,000 a year:

• Gross monthly income = about $8,333
• 28% for housing = about $2,333/month
• 36% for all debt = about $3,000/month

If you already pay $500/month on other debts, then your housing payment under the 36% rule would be about $2,500/month. In that case, the 28% limit of $2,333/month is the tighter cap.

Don’t forget

Your true affordable home price also depends on:

• Down payment
• Interest rate
• Property taxes and homeowners insurance
• PMI if you put down less than 20%
• HOA fees
• Closing costs
• Your emergency savings and other monthly expenses

Practical takeaway

The 28/36 rule is a widely used starting point for estimating affordability, but lenders may approve different amounts depending on your credit, debt, loan type, and the full monthly payment. It’s usually smarter to buy below the maximum you qualify for so you’re not stretched too thin.