How Much House Can I Afford? A 2026 Rule-of-Thumb Guide

How much house can I afford? For most buyers, the answer comes down to monthly income, existing debts and the mortgage rate. Lenders often use the 28/36 rule as a starting point. With the average 30-year fixed mortgage rate at 7.11% in Freddie Mac's November 12 survey, the payment you can manage limits your budget more than the price you'd like to pay.

The 28/36 rule, in plain English

The 28/36 rule is a guideline, not a law. The Consumer Financial Protection Bureau (CFPB) describes both parts in its homebuying and debt worksheets:

• 28%: Your total housing payment shouldn't be more than about 28% of your pre-tax (gross) monthly income. That covers principal, interest, property taxes, homeowners insurance and any HOA fees.
• 36%: All your monthly debt payments together shouldn't be more than about 36% of gross income. That includes the new mortgage plus car loans, student loans and minimum credit card payments.

The CFPB also notes that "some lenders will go up to 43 percent or higher". Being approved for a loan doesn't make it comfortable to repay. Those ratios use gross income, so the share of your take-home pay that goes to housing will be noticeably higher.

How much house can I afford on my salary?

The table below applies the 28% guideline at today's average rate. It assumes a 30-year fixed loan at 7.11%, about $400 a month for property taxes and insurance, no HOA fee and a 20% down payment. These are our own rounded estimates for illustration. Your taxes, insurance and loan terms will differ.

If you already have large monthly debt payments, the 36% limit may cut these numbers further. For example, at $100,000 a year your total debt payments shouldn't go above about $3,000 a month. A $700 car payment would leave about $2,300 for housing.

To check a specific home, use our loan EMI calculator. Enter the loan amount, 7.11% (or the rate you've been quoted) and 360 months. It shows the monthly principal and interest, which works the same way as the EMI formula in our guide on how loan EMI is calculated.

Why the mortgage rate changes your budget so much

The rate decides how much house a fixed monthly payment can buy. Here's how much a $2,000 monthly principal-and-interest payment can borrow on a 30-year loan:

• At 6%: about $334,000
• At 7.11%: about $297,000
• At 8%: about $273,000

A one-point change in the rate can move your budget by tens of thousands of dollars. The total cost matters as well. On a $400,000 loan at 7.11%, the monthly payment is about $2,691, and you'd pay roughly $569,000 in interest over 30 years if you kept the loan to the end. That's more than the amount you borrowed.

For context, Freddie Mac reported the 30-year average at 7.11% on November 12, 2026. That was down from 7.18% a week earlier but above 6.24% a year before. Its chief economist called the drop to a seven-week low "a welcome development". Rates change every week, so use your own lender quote rather than a national average.

Costs people forget to budget for

The mortgage payment is only part of what it costs to own a home. Before you settle on a price range, plan for:

• Down payment: Putting down less than 20% usually means paying mortgage insurance, which the CFPB notes increases your monthly payment.
• Closing costs: These are lender and third-party fees paid when you buy. Your Loan Estimate lists them.
• Property taxes and insurance: These vary widely by state and county, and they can go up after you buy.
• HOA or condo fees, if the property has them.
• Maintenance and repairs: Many owners set aside money every year for roofs, appliances and other big fixes.
• An emergency fund: Don't spend all your savings on the purchase.

Our percentage calculator makes it quick to work out a 5%, 10% or 20% down payment, or to see what share of your income a given payment would take.

What this means for your money

• Start with the payment, not the price. Decide on a monthly figure you're comfortable with, then work backwards to a price range.
• Pay down high-interest debt first. Lower card balances improve your debt-to-income ratio and free up cash each month. Our guide on how to pay off credit card debt faster shows how.
• Shop around for your rate. Even a small difference in the rate changes both the monthly payment and the total interest over the life of the loan.
• Test a few scenarios. Try different rates, down payments and loan terms in a calculator before you talk to a lender.
• Leave room for the rest of your life. Make sure there's still money for retirement saving, emergencies and day-to-day spending.

The bottom line

To work out how much house you can afford, start with your income, take off your existing debts and plug in today's mortgage rate. The 28/36 rule gives you a sensible starting point. Your own budget and how much risk you're comfortable with should set the final number. This article is general information, not personalised financial or mortgage advice.

Frequently asked questions

How much house can I afford on a $100,000 salary?

Using the 28% guideline, a 30-year loan at about 7.11%, roughly $400 a month for taxes and insurance and 20% down, a $100,000 income supports a home price of about $359,000. Existing debts, local taxes and your actual rate can change this a lot.

What is the 28/36 rule for mortgages?

It is a rule of thumb that housing costs should be no more than about 28% of gross monthly income and all debt payments, including the mortgage, no more than about 36%. Some lenders approve higher ratios.

Does a higher mortgage rate reduce how much house I can afford?

Yes. At the same monthly payment, a higher rate means a smaller loan. A $2,000 monthly principal-and-interest payment supports about $334,000 at 6% but only about $297,000 at 7.11% on a 30-year loan.