Key takeaway
Using the 28% front-end rule (housing costs ≤ 28% of gross monthly income), 20% down, a 6.75% 30-year fixed rate, 1.1%/year property tax, and $200/month insurance with no other debt: $60K salary → $1,400/month housing → $196,546 home; $80K → $1,867 → $272,980; $100K → $2,333 → $349,415; $120K → $2,800 → $425,849; $150K → $3,500 → $540,501; $200K → $4,667 → $731,587. The 36% back-end rule then caps total debt: every $500/month of other debt cuts roughly $82,000 off the affordable price at these rates.
How to read the table
Find your salary, then read across: your maximum monthly housing budget and the home price it buys under the stated assumptions. "Housing" means the full monthly cost — principal and interest, property tax, and insurance — not just the mortgage payment. For a deeper worked example at one salary level, see the full $100K deep dive.
| Salary | Max housing / month | Affordable home price |
|---|---|---|
| $60,000 | $1,400 | $196,546 |
| $80,000 | $1,867 | $272,980 |
| $100,000 | $2,333 | $349,415 |
| $120,000 | $2,800 | $425,849 |
| $150,000 | $3,500 | $540,501 |
| $200,000 | $4,667 | $731,587 |
The 28/36 rule explained
The 28% front-end rule says your total monthly housing cost — principal, interest, taxes, insurance, and HOA — should stay at or under 28% of your gross monthly income. That is the rule the table above uses.
The 36% back-end rule is the second gate: your total monthly debt, including housing plus car payments, student loans, and minimum credit card payments, must stay under 36% of gross. At these rates, every $500/month of other debt cuts roughly $82,000 off the affordable home price. A borrower with heavy non-housing debt can qualify for far less than the 28% table suggests.
Assumptions behind every number
- 20% down payment (no PMI)
- 6.75% fixed rate, 30-year term
- Property tax: 1.1% of home value per year
- Homeowners insurance: $200/month
- No HOA dues
- No other debt
Change any one of these and the affordable price moves. A lower rate or a larger down payment raises it; higher property taxes, insurance, or HOA dues lower it.
What changes your number
- Down payment size. More down means a smaller loan for the same price — 20% down is the no-PMI baseline here.
- Rate. Mortgage rates move affordability more than most people expect; a full point changes the affordable price by tens of thousands of dollars.
- Property tax by state. The table uses 1.1%/year, but effective rates vary widely by state — a 2% state shrinks your affordable price substantially.
- HOA dues. Monthly HOA fees come straight out of your 28% housing budget.
- Other debts. The 36% back-end rule: every $500/month of other debt cuts roughly $82,000 off the affordable price at these rates.
Buying below your max
The table gives you a ceiling, not a target. The maximum assumes nothing else competes for your money — but a home costs more than its payment: maintenance runs roughly 1–2% of the home's value per year, and repairs arrive on their own schedule, not yours. Buying below your maximum keeps room in the budget for maintenance, lifestyle, and saving, and it keeps the 36% back-end ratio comfortable instead of tight.
Common mistakes
- Shopping the max approval. A lender's maximum is a risk ceiling for the lender, not a budget recommendation for you.
- Forgetting tax and insurance. Comparing salaries to mortgage-only payments overstates what you can afford — the 28% rule counts the full PITI.
- Ignoring the back-end ratio. If you carry car or student-loan payments, the 36% rule — not the 28% table — is what actually limits your price.
Bottom line
At 6.75% with 20% down, the 28% rule turns salary into a concrete home-price range: roughly $273,000 on $80K and $541,000 on $150K. Then check the 36% back-end rule with your actual debts, price in the real taxes and insurance for the property, and buy below your max — the table is a starting point, not a finish line.
Run your own numbers
Our free Rent vs Buy Calculator compares the full cost of buying versus renting for your situation, including taxes, insurance, and maintenance.
Related calculators
- Rent vs Buy — compare buying costs against renting over time.
- Mortgage Payoff — see how your loan amortizes and what extra payments save.
- Home Equity — estimate your equity as the loan pays down and values change.
Frequently asked questions
How much house can I afford on $80K a year?
Using the 28% front-end rule with 20% down at 6.75% on a 30-year fixed loan, an $80,000 salary supports a maximum monthly housing payment of $1,867, which buys a home priced around $272,980 (including 1.1%/year property tax and $200/month insurance, with no other debt).
What salary do I need for a $500K house?
Between $150,000 and $120,000 in the table: a $150,000 salary supports a ~$540,501 home, while a $120,000 salary supports ~$425,849. So you need roughly $140,000–$150,000 of salary (under the 28% rule, 20% down, 6.75%/30-year, 1.1% property tax, $200/month insurance, no other debt) to afford a $500,000 home.
Does the 28% rule include taxes and insurance?
Yes. The 28% front-end rule applies to your total monthly housing cost — principal and interest plus property taxes, homeowners insurance, and HOA dues. The table above includes principal and interest, 1.1%/year property tax, and $200/month insurance in each affordable price.
How does debt affect how much house I can afford?
The 36% back-end rule caps your total monthly debt — including housing, car payments, student loans, and minimum credit card payments — at 36% of gross income. Every $500/month of other debt cuts roughly $82,000 off the affordable home price at these rates. Heavy non-housing debt can reduce your real buying power well below the 28% table figures.
Is it smart to buy the maximum house I qualify for?
Usually not. The maximum is a ceiling, not a target: it leaves no room for maintenance (which runs 1–2% of the home's value per year), lifestyle spending, or saving. Buying below your max — and rechecking the math on the exact taxes, insurance, and HOA for the specific property — is the safer move.
Last updated: September 28, 2026