Want a straight answer? How much house can you afford on your salary without guessing?
Most people start with a rule of thumb. Lenders start with math. Your salary matters, but so do your monthly debts, your down payment, your credit score, and the interest rate you can lock. This guide shows you both views so you walk into preapproval with a real number, not a hope.
The Salary Rule of Thumb
A simple starting point is to multiply your gross annual salary by 2.5 to 3. On $80,000, that points to a home price near $200,000 to $240,000. On $120,000, you land near $300,000 to $360,000.
Treat that as a ceiling for planning, not a target. With 30 year fixed rates near 6.49% on the Freddie Mac survey as of July 9, 2026, many buyers are safer closer to 2.5x than 3x.
- $60,000 salary: about $150,000 to $180,000 as a rough range
- $85,000 salary: about $212,000 to $255,000 as a rough range
- $100,000 salary: about $250,000 to $300,000 as a rough range
- $150,000 salary: about $375,000 to $450,000 as a rough range
What Lenders Actually Check
Lenders care about debt to income, or DTI. Front end DTI is housing costs divided by gross monthly income. Back end DTI adds your other monthly debts.
A common guide is the 28/36 rule. Keep housing near 28% of gross monthly income. Keep all debts near 36%. Many loan programs allow higher back end ratios, sometimes into the low 40s, if the rest of your file is strong.
Example: You earn $85,000 a year. That is about $7,083 a month before taxes. At 28%, housing can land near $1,983 a month. That payment must cover principal, interest, taxes, and insurance. It may also include HOA dues.
A Worked Example at $85,000
Assume a 30 year fixed rate near 6.49%, 10% down, and $400 a month in taxes and insurance combined. You also pay $500 a month in other debts.
- Gross monthly income: $7,083
- Target housing budget at 28%: about $1,983
- Other debts: $500
- Back end DTI if housing is $1,983: about 35%
After setting aside taxes and insurance, you might have roughly $1,500 to $1,600 left for principal and interest. On a 6.49% 30 year loan, that supports a loan amount near the low to mid $200,000s. Add your 10% down payment and you get a purchase price in a similar ballpark. Your exact number moves with local taxes, insurance, and the rate you lock.
For salary specific walkthroughs, see our guides on how much house you can afford on $75k and how much house you can afford on $100k.
Factors That Change the Number Fast
- Higher debts shrink buying power even if your salary looks strong
- A bigger down payment lowers the loan and can remove PMI at 20% equity on conventional loans
- Credit score affects your rate, and rate swings change payment more than most people expect
- Property taxes and insurance vary widely by zip code
- HOA fees count as housing cost for most lenders
Comfort Versus Qualification
Banks approve the maximum they think you can repay. That is not always the payment you want every month for 30 years. Build a budget with take home pay. Keep an emergency fund. Leave room for maintenance. A house that fits on paper can still feel tight in real life.
Run Your Numbers Before You Shop
Guessing a price range wastes weekends. Plug your salary, debts, and down payment into our Affordability Calculator. Then check the payment on a specific price with our Monthly Payment Calculator. When those two numbers agree with your budget, you are ready to talk to a lender.
Try it yourself — adjust the numbers below
Your Finances
Car loans, student loans, credit cards, etc.
≈ 13.3% of home price
Your Affordability Range
You can afford homes between $272,000 and $300,000
Based on a 6.25% interest rate and 35.1% debt-to-income ratio
Range assumes PMI of approximately $113/month included in payment
Recommended Price
$272,000
$1,773.80/mo · conservative
Maximum Price
$300,000
$1,983.53/mo · upper limit
Monthly Payment Breakdown
35.1%
Your DTI is within ideal range. Lenders typically approve up to 43%.
Your 13.3% down payment triggers PMI. At your credit score (Good (670–739)) and 86.7% LTV, PMI costs approximately $113/month ($1352/year).
How to eliminate PMI:
Putting down $60,000 (20%) eliminates PMI and saves $1352/year.
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Max home price
$272,000 recommended
$300,000
Key Takeaway
This is general educational information only, not financial or lending advice. Rates, fees, and program rules change. Confirm current terms with a licensed loan officer before you commit.