Affordability
How much house can I afford?
There are two very different answers to this question: what a lender will let you borrow, and what you can comfortably afford. They're often not the same number, and confusing them is one of the most common ways buyers end up stretched thin.
How lenders decide what you qualify for
Lenders mainly look at your debt-to-income ratio (DTI) — your total monthly debt payments divided by your gross monthly income. Most lenders want your total housing payment plus other debts to stay under roughly 43-50% of your gross income, depending on the loan type.
The key word there is gross — before taxes. A number that looks affordable against your pre-tax income can feel very different against what actually lands in your bank account.
What "comfortable" actually means
A more conservative rule many financial planners suggest is keeping your total housing payment under about 28% of your gross income, or around 25-30% of your take-home pay. That leaves room for the things a DTI calculation doesn't see: retirement savings, an emergency fund, childcare, travel, and the simple buffer that keeps an unexpected expense from becoming a crisis.
The costs people forget to include
Your monthly housing cost is more than principal and interest. A realistic budget also includes property taxes, homeowners insurance, mortgage insurance if your down payment is under 20%, HOA fees if applicable, and ongoing maintenance. Maintenance alone often runs 1-2% of the home's value per year.
How to find your real number
Start from your comfortable monthly payment, not from a maximum loan amount. Work backward: decide what you can pay each month without straining the rest of your life, then figure out what home price that supports at current rates. That's the opposite of how many buyers do it — and it's why some people feel "house poor" even though they technically qualified.
See your real numbers
Our affordability calculator and hidden-costs checker show both what you qualify for and what it actually costs each month.
Try the calculatorsThis article is educational and general in nature. It is not financial advice. Your specific situation depends on factors not covered here — consult a licensed lender or financial professional.