How Much House Can You Really Afford? (2026 Guide)
By Colson · Reviewed by Abodemic Editorial Standards · Updated June 1, 2026
Most lenders cap your housing payment near 28% of gross income and total debt near 43%. But the amount a lender approves isn't the amount you should spend — affordability also means an emergency fund, retirement savings, and room for life. This guide walks through both.
How much house can you afford?
A common rule is that your monthly housing payment should stay under 28% of your gross monthly income, and your total debt payments under 43%. Whichever limit you hit first caps your price. But the amount a lender will approve is a ceiling, not a target — true affordability also leaves room for savings, emergencies, and the rest of your life.
Run your own numbers with the affordability calculator, which solves for the highest price that keeps you inside both limits.
What the 28/36 rule really means
The "front-end" ratio (28%) is housing alone — principal, interest, taxes, insurance, and any HOA. The "back-end" ratio (36%, often stretched to 43% for qualified mortgages) adds your other debts: car loans, student loans, and credit-card minimums. Paying down a car loan can raise your home budget more than a small raise would.
How your down payment changes the answer
A bigger down payment helps twice: it shrinks the loan (lowering principal and interest) and, at 20% down, removes PMI. Both cut your monthly payment, which lets you qualify for a higher price at the same income. Use the mortgage calculator to see how down payment moves your payment.
A sensible way to set your number
Start from the payment you're comfortable making every month — not the maximum a lender offers — and work backward to a price. A home you can comfortably afford is one that still lets you save for retirement and weather a surprise.