How Much House Can I Afford?

How much house you can afford comes down to five factors: 

1. Your income
2. Your monthly debts (DTI)
3. Your credit score (which affects your rate and approval odds)
4. Your down payment
5. The local costs of owning a home (taxes, insurance, HOA, PMI, etc.)

Tired of guessing how much you could borrow? Use our mortgage affordability calculator to learn your exact amount in seconds. Next, walk through how lenders decide your number and how to adjust each factor to raise your price range.

Table of Contents

1. Home affordability calculator
2. How do lenders decide how much house you can afford?
   1. 1. Debt-to-income ratio (DTI)
   2. 2. Credit score and mortgage rate
   3. 3. Down payment
   4. 4. Local costs (taxes, insurance, and HOA fees)
3. 6 ways to increase how much house you can afford
   1. 1. Lower your monthly debts
   2. 2. Improve your credit score
   3. 3. Save more for your down payment
   4. 4. Adjust your loan term
   5. 5. Choose a lower-cost area or property
   6. 6. Estimate maintenance and utilities
4. FAQ

Home affordability calculator

Instead of giving you a random “rule of thumb,” our calculator shows what you can afford based on your real numbers, including income, debts, taxes, insurance, HOA, and your expected interest rate.

Once you get your number, the rest of this guide will help you understand why the calculator landed there and what to tweak if you want a little more breathing room in your budget.

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To determine a client’s “comfortable” monthly mortgage payment, I will begin by looking at what they pay now for housing and how that fits into their budget. That gives me a sense of whether they need a lower monthly payment or can comfortably take on more.

I review this alongside their cash reserves and financial goals to make sure the payment makes long-term sense.

How do lenders decide how much house you can afford?

Lenders all use slightly different formulas to calculate mortgage affordability. But the big picture is the same: They’re looking for clues that you can comfortably make the payment every month.

Here’s what they check first.

1. They start with your debt-to-income ratio (DTI)

Your debt-to-income ratio is the backbone of every affordability decision. It compares your monthly debt payments to your gross monthly income. The lower your DTI percentage is, the more room you have for a mortgage payment.

Lenders often look at two types of DTI:

1. Front-end DTI: This includes only the monthly payment for your new mortgage (so think mortgage, taxes, insurance, and HOAs).

2. Back-end DTI: This includes all debts — the new mortgage payment plus existing car loans, credit cards, student loans, personal loans, and so on. 

Most lenders aim to keep your back-end DTI between 36% and 43%, though some programs stretch higher if everything else in your file is strong.

2. They look at your credit score and mortgage rate

Lenders use your credit score to set your interest rate, and your rate is what shapes your monthly payment.

A higher rate means more of your payment goes toward interest, which limits how much you can borrow. A lower rate leaves more room for principal, which raises your max price.

Even a small score improvement can shift that balance enough to change what the mortgage affordability calculator shows you.

For more, see our plain-language guide on how mortgages work.

3. They factor in your down payment

Your down payment is one of the fastest ways to change your mortgage affordability. Here’s why: A bigger down payment lowers your loan amount, which lowers your monthly payment … and that lower payment can open the door to a higher price point.

It can also remove PMI once you reach 20%.

4. They estimate local costs like taxes, insurance, and HOA fees

Property taxes, home insurance, and HOA fees also factor into how much house you can afford. 

A house in a high-tax county or a condo with a $500-per-month HOA might reduce the price range your lender approves (even if the home itself looks affordable at first glance).

These “hidden” costs are why two homes with the same purchase price can have totally different budgets once you plug in all the extras.

When my clients and I meet to determine how much house they can afford, we start by discussing what they want and need in their new home, such as single-story living, the number of bedrooms and bathrooms, a covered garage, and other important features.
Then we review comparable homes in their preferred areas to understand the typical price range.

From there, we look at the loan programs they may qualify for: VA, USDA, FHA, conventional, jumbo, and others. We will compare the down payment requirements to determine whether they’re ready to start making offers or may need to save more or strengthen their credit profile.

One of the most common mistakes I see is underestimating annual maintenance costs and failing to set aside a dedicated home-maintenance reserve. Planning for these expenses upfront helps clients avoid taking on additional debt or tapping into their emergency fund later.

6 ways to increase how much house you can afford

If your home affordability calculator result felt a little tight, here are some ways you could try increasing the amount:

1. Lower your monthly debts

Paying off or reducing a monthly payment could improve your DTI enough to increase your affordable mortgage amount to where you want it. This could look like:

• Paying off that $400-a-month car loan you just have a year left on
• Consolidating your high-interest debt into a personal loan with a lower interest rate and smaller monthly payment
• Paying off medical debt

2. Improve your credit score

Lenders tend to reserve their best mortgage interest rates for scores in the mid-700s and above. Even moving from the high 600s into the low 700s can help.

Some easy ways to improve your credit include:

• Paying down credit card balances
• Making all payments on time
• Fixing any errors you spot on your report

3. Save more for your down payment

A larger down payment could help you afford a more expensive home.

For example, say you have $10,000 saved and you’re eyeing a $400,000 home. If the monthly payment pushes your DTI too high, increasing your down payment to around $20,000 could bring that payment down enough to fall back into an acceptable DTI range.

4. Adjust your loan term

Your loan term has a big impact on how much mortgage you can afford. A 30-year loan spreads the cost out over a longer period, which keeps your monthly payment lower and gives you more breathing room in your DTI. A 15-year loan builds equity faster, but the payment can jump so much that it limits your overall price range.

5. Choose a lower-cost area or property

Where you buy can be just as important as what you buy. Property taxes, insurance rates, and even HOA fees vary wildly by city and county, and those differences could quietly change how much house you can afford.

If condos are on your radar, pay close attention to HOA fees. A home with a $75 HOA might fit easily into your affordability math. In comparison, one with a $500 HOA could severely limit how much you can borrow (even if both homes are listed for the same amount).

6. Estimate maintenance and utilities before committing

Every home comes with maintenance, repairs, and utilities that can shift how much house you can realistically afford month to month.

A common rule of thumb is to set aside about 1% to 4% of the home’s value per year for maintenance and utilities. So on a $400,000 house, 1% is roughly $4,000 annually (or about $330 per month). Older homes or homes in harsher climates may need more.

What’s the difference between what you can afford vs. what’s comfortable?

What a lender says you can afford on paper isn’t always what feels good in real life. Rather, a comfortable mortgage payment still leaves room for groceries, child care, hobbies, travel, emergencies, and the random Home Goods runs we all pretend not to make. 

So don’t just take the number your lender gives you and run with it. Check how that mortgage payment fits into your daily life. 

For example, say you earn $6,000 a month and get approved for a mortgage with a $2,400 monthly payment. Even if that technically fits within the maximum allowable DTI, you might find the payment unmanageable by the time you add in day care, rising utility costs, and gas for your commute.

A good rule of thumb is to aim for the payment that leaves your budget breathing room, even on months when everything hits at once. 

Where to go from here

Once you know how much house you can afford, you can play with the numbers until the monthly payment feels right.

Here are a few smart next steps:

• Revisit the home affordability calculator above with different scenarios (bigger down payment, slightly lower rate) to see how your number shifts.
• Shop around. Getting quotes from multiple lenders can uncover a lower rate.
• Talk with a mortgage broker or real estate agent who understands your local market. They can help you translate your affordability range into realistic listing prices.
• If you’re still deciding whether it’s the right moment to buy, check out our guide on Is Now a Good Time to Buy a House? for a big-picture look at the market.

And when you’re ready to compare real offers, start with a reputable lender you trust. SoFi and other top mortgage lenders let you preview rates with no commitment. It’s a low-pressure way to see what’s possible.

FAQ

How much house can I afford on $50K/$75K/$100K salary?

A salary alone isn’t enough to pin down a home price, because lenders also weigh your monthly debts, down payment, credit score, and local costs like property taxes and insurance. Two people earning $75K can get wildly different results if one has a $500 car payment and student loans and the other is nearly debt-free.

As a starting point, plug your real numbers into the affordability calculator and compare a few scenarios: current debts vs. paid-off debts, a higher down payment, and a slightly lower interest rate. Those small changes often move your “affordable mortgage amount” more than the salary number itself.

Is there a rule of thumb for home affordability?

Two common rules are the 28/36 rule (try to keep housing costs around 28% of gross income and total debt around 36%) and the “3x income” rule (home price around three times your annual income). They can be useful for quick back-of-the-napkin planning.

But they’re limited because they don’t account for your interest rate, property taxes, insurance, HOA dues, or debts (all the stuff that makes today’s payment math so different from year to year and city to city). Use them as a starting point, not a decision.

Should I trust what the lender says I can afford?

Treat the lender’s number as a maximum you might qualify for, not what you should spend. Lenders focus on whether you can make the payment based on DTI and your file. They’re not budgeting your groceries, child care, travel, hobbies, emergency fund, or the fact that insurance and taxes can rise.

A better approach is to compare the lender’s estimate to your “comfortable” payment, one that still leaves breathing room even in expensive months (repairs, higher utilities, or surprise bills). If the lender’s number feels tight, lower the target price, or adjust the levers (debt, down payment, rate shopping).

Will I always need a 20% down payment?

No. A 20% down isn’t required; it’s just the point where conventional loans typically stop charging PMI. Many buyers use 3% down for conventional loans, 3.5% down for FHA loans, and 0% down VA or USDA (if eligible).

The trade-off is that a smaller down payment often means a larger loan, a higher monthly payment, and potentially mortgage insurance, so it can reduce your flexibility. If you go low-down-payment, it’s extra important to keep cash reserves for repairs and unexpected costs after closing.