How much house can I afford on a $75k, $100k, or $150k salary?

The short version: at a 7% mortgage rate with 20% down and the standard 28% housing ratio, every $10,000 of gross salary buys you roughly $35,000 of home. A $100,000 earner can defensibly afford a $350,000 house. A $150,000 earner can stretch to about $530,000. A $75,000 earner lands near $255,000. Those numbers are the bank's view of what you can afford, not always what you should spend.

This guide walks through the 28/36 rule, the full PITI math, how down payments and rates swing your buying power, and the gap between what a lender will approve and what actually leaves you with a life.

The 28/36 rule, explained honestly

The 28/36 rule is the framework lenders and financial planners have used for decades. Two ratios:

• Front-end ratio (28%): your total housing payment (PITI plus HOA) should be no more than 28% of gross monthly income.
• Back-end ratio (36%): your total monthly debt payments (housing plus car, student loans, credit cards, minimums on everything) should be no more than 36% of gross income.

The 28% front-end limit is tight in any high-cost-of-living metro. In the Bay Area, Seattle, Boston, NYC, or Denver, 28% of a normal salary does not buy anything close to a family home. Lenders know this. Qualified Mortgage rules technically allow a back-end DTI up to 43%, and many loan programs push that to 45% or even 50% with compensating factors (big down payment, high credit score, reserves).

The trap: a bank approving you at 45% DTI does not mean 45% is comfortable. At 45% back-end, nearly half your gross income is going to debt before taxes, retirement, childcare, or food. Lots of people sign those loans and regret them within two years.

What PITI actually includes

PITI is the four parts of your mortgage payment: Principal, Interest, Taxes, Insurance. People shopping online quote the P+I number (what the mortgage calculator defaults to) and then get blindsided when the actual monthly payment is 30 to 40% higher.

• Principal and interest on a $400,000 loan at 7% over 30 years is $2,661/month. Straightforward.
• Property taxes run from about 0.3% in Hawaii to 2.5% in New Jersey or Illinois. On a $500,000 home at 1.1% (roughly the US median), that is $458/month. On the same home in Texas at 1.8%, it is $750/month.
• Homeowner's insurance averages $1,400 to $1,800/year nationally, or $120 to $150/month. Florida, Louisiana, and parts of California are much higher due to wildfire and hurricane exposure. Some Florida quotes are now running $400 to $600/month.
• PMI (private mortgage insurance) applies if your down payment is under 20% on a conventional loan. Expect 0.5 to 1.5% of the loan per year, depending on your credit score. On a $400,000 loan, that is another $165 to $500/month.

Run this math before you fall in love with a listing. A $500,000 home in Texas with 10% down, 7% rate, 1.8% property tax, $180 insurance, and 0.8% PMI runs about $4,200/month PITI + PMI. The P+I alone is only $2,995. That gap of $1,200/month is the entire reason people feel "poorer than the spreadsheet said" after closing.

Down payment reality in 2026

The 20% down payment is still the cleanest option because it avoids PMI entirely and gets you the best rates. It is also out of reach for most first-time buyers. The median first-time buyer puts down about 8%.

• Conventional 3 to 5% down: available to most buyers with a 620+ credit score. You pay PMI until you hit 20% equity, then it drops off automatically at 22% and can be requested at 20%.
• FHA 3.5% down: low barrier to entry, allows credit scores as low as 580. The catch is MIP (mortgage insurance premium) that typically sticks for the life of the loan if you put down less than 10%. To get rid of MIP you usually need to refinance into a conventional loan. Factor that future refi cost in.
• VA and USDA: 0% down for eligible veterans or rural buyers. No PMI. If you qualify, these are the best products on the market.
• 20% down: no PMI, best rates, lower monthly payment, more offers accepted in competitive markets. On a $400,000 home that is $80,000, which takes most people years of saving.

Don't drain your emergency fund to hit 20%. A 10% down payment with PMI and 6 months of expenses in savings beats a 20% down payment with $2,000 in the bank and a furnace that is about to die.

Walkthrough: $100k salary, step by step

Here is the actual math for a $100,000 earner with decent credit, minimal debt, 20% down, and a 7% rate in an average property-tax state:

1. Gross monthly income: $100,000 / 12 = $8,333.
2. Max PITI at 28%: $8,333 x 0.28 = $2,333/month.
3. Back out taxes and insurance: at 1.1% property tax and $120/month insurance on a $350,000 home, that is $320 + $120 = $440/month. Leaves $1,893 for principal and interest.
4. Solve for loan amount: $1,893/month of P+I at 7% over 30 years supports a loan of about $284,500.
5. Add 20% down: $284,500 loan / 0.80 = $355,625 home price. Call it $350,000 to leave room for closing costs and furniture.

So a $100k earner following the 28% rule lands around $350,000. That is the conservative answer. A lender might approve you up to about $475,000 by stretching to 36 to 40% DTI, but the monthly PITI would run closer to $3,100 which turns into a genuinely tight budget once you add retirement contributions, a car payment, and groceries.

Live in a high-tax state like New Jersey (2.2% property tax)? Same $100k income, same 28% rule, but the tax line jumps to $640/month on a $350,000 home. That pushes the affordable price down to roughly $310,000 for the same monthly PITI.

$75k and $150k salaries

$75,000 salary: gross monthly is $6,250. 28% cap is $1,750/month PITI. After $255/month for taxes and insurance on a $250,000 home, you have $1,495 for P+I, which supports a loan of about $225,000. With 20% down that is a $281,000 home, or closer to $255,000 if you only put 10% down and absorb PMI. In a higher-tax state, knock $20,000 to $30,000 off.

$150,000 salary: gross monthly is $12,500. 28% cap is $3,500/month PITI. After $530/month for taxes and insurance on a $530,000 home, you have $2,970 for P+I, which supports a loan of about $446,000. With 20% down that is a $557,000 home. Round to roughly $530,000 to leave buffer for closing costs and higher insurance on a pricier home. Stretch to 33% and a lender will green-light closer to $625,000.

The costs nobody mentions

PITI is not the full cost of homeownership. Budget for these before they hit:

• Closing costs (2 to 5% of loan): on a $350,000 purchase, that is $7,000 to $17,500 in cash on top of your down payment. Lender fees, title insurance, appraisal, escrow funding, and prepaid taxes.
• Maintenance (1% of home value per year): a $400,000 home averages $4,000/year of upkeep over time. Some years zero, some years a $12,000 roof. Set aside $333/month and you will be fine.
• HOA fees: condos and planned communities often run $200 to $600/month, sometimes $1,000+. This counts toward your front-end ratio and eats into buying power.
• Utilities step-up: a 2,200 square foot house costs meaningfully more to heat, cool, and light than a 900 square foot apartment. Expect utilities to double or triple vs renting.
• Furniture and appliances: empty rooms are expensive. First-year spend of $5,000 to $15,000 on furniture, appliances, and tools is normal.

How much interest rates change the answer

Rates are the biggest single input after income. A 1 percentage point change in the mortgage rate shifts your buying power by roughly 10 to 12%. Same $2,333/month PITI budget, different rates:

Assumes $2,333/month budget for P+I only, 30-year fixed, 20% down. Actual PITI adds taxes and insurance.

This is why the "wait for rates to drop" argument has teeth. If rates fall from 7.5% to 6.5%, the same buyer who qualified for $339,000 now qualifies for $375,000. The flip side: everyone else gains buying power too, so prices usually rise to meet the new demand. The cleanest play is to buy when the payment works for you at the current rate. Refinance later if rates fall.

What to do if you are priced out

If the numbers don't work, you have a few honest options:

• Wait and save more. A larger down payment reduces the loan and the monthly payment. Going from 10% to 20% down cuts roughly $150 to $250/month on a typical loan and kills PMI.
• Lower your target. A smaller home, an older home that needs work, or a less trendy neighborhood can drop your price 20 to 30% for very similar square footage. The "starter home" concept still exists, just not on Zillow's first page.
• Move to a cheaper market. The same $150,000 salary buys a 900 sqft condo in San Francisco and a 2,800 sqft house with a yard in Columbus or Pittsburgh. Remote work made this more viable than it was 10 years ago.
• House-hack. Buy a duplex or a 3-bed and rent out bedrooms. FHA allows owner-occupied 2 to 4 unit properties with 3.5% down. Rental income can cover a big chunk of PITI and lets you buy more house than your salary alone supports.
• Pay down debt first. Every $300/month of car or student loan payment you eliminate frees up roughly $45,000 of mortgage affordability at a 7% rate. Pay off the car before you shop for the house.

The affording test vs the comfortable test

A lender's approval is a yes/no question about whether you can physically make the payment from current income. It says nothing about whether you can make the payment if one spouse loses their job, if the car dies, or if a medical bill shows up.

Run a stress test before you sign. Two questions:

1. If your household income dropped by 30% tomorrow (layoff, reduced hours, illness), could you still make PITI for 6 months while you figured things out? You should have a yes here, either from reserves or because the payment is low enough that one income covers it.
2. Does the mortgage payment leave room for 15% retirement contributions, a reasonable grocery budget, childcare if you have kids, and at least a small amount of discretionary spending? If you're hitting the max approved amount and the budget is tight before you have moved in, it will only get worse.

A good rule: target a PITI that leaves you spending no more than 25% of take-home pay on housing. That is more conservative than 28% of gross because it accounts for taxes and retirement. On a $100k salary with roughly $6,500 take-home, that is $1,625/month, which corresponds to a home around $245,000 to $275,000 at current rates. Less than the lender's max, but the version you can actually live with.

What to do next

The clearest way to answer "how much house can I afford" is to run your actual numbers with your actual debts, down payment, and local property tax rate. Then pull the monthly PITI back to 25% of take-home if you want a life beyond the mortgage. All the tools below run entirely in your browser. Nothing you enter is uploaded.

• Mortgage Calculator for the full PITI breakdown at any home price, down payment, rate, and loan term.
• Loan Calculator for comparing loan scenarios, total interest, and amortization schedules.
• Auto Loan Calculator to see how paying off the car changes your mortgage DTI and buying power.
• Compound Interest Calculator for modeling how much a bigger down payment is worth vs investing the difference.

← Back to all posts