Buying
How much house can I afford?
This page helps you determine a purchase price that fits your income, your existing obligations and the cash you can commit without emptying your reserves.
There are two numbers: the maximum a lender will approve, and the amount you can spend while still funding everything else in your life. They are rarely the same, and the second one is the one that matters.
- What this is
- A way to find your real purchase budget, not just your approval amount.
- Who it is for
- First-time and repeat buyers deciding on a price range before they shop.
- The problem
- Pre-approval measures what a lender is willing to risk. It does not measure what leaves you comfortable after you move in.
- What happens next
- Set a target monthly payment, work backwards to a price, then verify taxes and insurance for the specific address.
How lenders decide
Lenders look at your debt-to-income ratio: total monthly debt payments, including the new housing payment, divided by gross monthly income. Many conventional programs allow roughly 43 to 50 percent, depending on the loan and your credit and reserves.
Housing cost in that calculation means principal, interest, taxes, insurance and association dues — not the mortgage payment alone.
How to decide for yourself
Work from your take-home pay, not gross income. Start with a housing payment near 25 to 30 percent of net pay, then check that retirement contributions, childcare, transport, savings and debt payoff still fit.
Add a maintenance reserve of about one percent of the property value annually. Homes require money on their own schedule, not yours.
Cash matters as much as income
You need the down payment, closing costs of roughly two to five percent of the price, moving costs, and immediate repairs — plus reserves left over afterward.
A larger down payment lowers the payment and can remove mortgage insurance, but draining every account to reach it converts a manageable repair into a crisis.
Do the math
Mortgage Payment Calculator
Principal and interest, total interest, and what the term costs you.
Open the mortgage payment calculator →Common questions
How much income do I need for a $400,000 house?
It depends on your rate, down payment, taxes and other debts, but a common range is a gross household income of roughly $95,000 to $125,000. Because local property taxes and insurance vary widely, the reliable way is to compute the full payment for the specific address and compare it to your income.
Is the 28/36 rule still useful?
As a sanity check, yes: housing at or below 28 percent of gross income and total debt at or below 36 percent. It is conservative by today's lending standards, which is precisely why it is a useful counterweight to a pre-approval.
Should I spend my full pre-approval amount?
Usually not. Pre-approval is a ceiling based on ratios, not a recommendation. Buyers who spend to the ceiling have the least room when taxes rise or a system fails.
How much should I put down?
Enough to keep the payment comfortable and reserves intact. Twenty percent avoids mortgage insurance on conventional loans, but a smaller down payment that preserves an emergency fund is often the sounder choice.
Do student loans affect how much house I can buy?
Yes. Monthly student loan payments count in your debt-to-income ratio, and each $500 of monthly obligation reduces your borrowing capacity by roughly $80,000 to $100,000 depending on rates.
What if property taxes are high where I am buying?
High taxes reduce the price you can afford at the same payment, sometimes substantially. Always price the specific address rather than a regional average — two towns twenty minutes apart can differ by hundreds of dollars a month.
Want this answered for one property?
Property Intelligence™ applies this to a specific address using public records, uploaded documents, comparable sales and professional review — and states plainly what is known, what is missing and what to do next.
Related reading
Part of these decisions
Last reviewed August 3, 2026. Educational information, not financial or legal advice.