How Much House Can I Afford by Salary?

Type your annual salary, monthly debts and down payment, pick a state for its property-tax and insurance rates, and get the maximum home price and payment under the lending rule you choose — plus the states and cities where that budget buys the median home.

The calculator works the way an underwriter does, backwards from the payment: your gross monthly income × the housing ratio gives the most you can spend on principal, interest, tax, insurance and PMI; your income × the total-debt ratio minus your existing debts gives a second ceiling; the lower of the two is the payment, and the home price is whatever that payment buys at your rate, term and down payment. The where it buys block then checks that price against the median home value in every state and the 400 largest cities, so you can see at once whether the budget is a house in Ohio or a condo in San Jose.

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

On a $100,000 salary you can afford a home of about $383,620 with 20% down at 6.25%, a payment of $2,333 a month under the 28% housing-ratio rule, U.S.-average property tax and insurance, and no other debts. With 10% down (and PMI) the figure drops to $323,563; with $900 a month of car and student-loan payments it drops to $342,981 because the 36% total-debt limit takes over (any debts above about $670 a month do this at $100k). Lenders that allow a 36% or 45% ratio will approve more; whether you should borrow it is a separate question.

The same math gives about $221,063 on $60k, $302,342 on $80k and $790,013 on $200k. That is 3.7× to 4.0× income with 20% down — a loan of about 3× income. At the 3% rates of 2021 the same 28% payment carried a price of about $525,844 on $100k, which is the real reason “how much can I afford” feels tighter than it used to. The U.S. median home is $303,400 (Census ACS 2023), so at 6.25% the median house takes a household income of roughly $80,260 with 20% down.

Maximum home price by salary: $30k to $300k

The table runs the calculator for a range of salaries at the default settings: 28% housing ratio, no other debts, 30-year loan at 6.25%, U.S.-average property tax (0.98%) and insurance ($1,569 a year). Because the insurance premium is a flat dollar amount rather than a percentage, it eats a bigger share of a small budget — which is why the price-to-income multiple rises with salary.

Use the row for your salary as a ceiling, then subtract roughly $17,000 of price for every $100 a month of car, student-loan or card payments once those push you past the total-debt limit. The home-values pages show what the median actually costs in each state, county and ZIP so you can set the row against real listings.

Income needed for a $400k, $500k or $1M house

Turn the question around and the 28% rule says you need an income of $104,031 for a $400,000 house and $128,637 for $500,000 with 20% down at 6.25%, because the payments are $2,427 and $3,002 a month. Put 10% down and the income needed rises by about 18% (bigger loan plus PMI); accept a 36% housing ratio and it falls by about a fifth.

The monthly payment by home price page runs any price through the same formula with your state’s tax and insurance, and average cost of a house shows what the median actually costs by ZIP code.

The 28/36 rule and what lenders actually allow

The 28/36 rule says housing costs (principal, interest, taxes, insurance, PMI and HOA dues) should take no more than 28% of gross monthly income, and housing plus all other debt payments no more than 36%. It is a rule of thumb from the days of conventional underwriting manuals, and it is still the ratio most lenders describe as comfortable — but it is not the legal limit.

Two things follow. First, the calculator’s Conservative setting is what you can afford without strain; the FHA and Conventional stretch settings are closer to what you can get approved for. A $100k salary with no debts goes from $383,620 to $499,733 between the two — same income, same house prices, a payment that leaves $667 less in your pocket each month. Second, lenders use gross income, so a 36% ratio is closer to 45–50% of take-home pay after federal and state tax; a 28% ratio of gross is roughly a third of net. If you want the payment to feel like 25% of your take-home, use the custom setting and enter about 20%.

Why the interest rate matters more than the price

At a fixed payment, the loan you can carry moves inversely with the rate. The table holds a $100k salary, 20% down and the 28% rule constant and changes only the rate: between 5% and 8% the affordable price swings from $431,000 to $329,435 — a 24% cut from three points of rate, more than most price corrections deliver.

What to do with that: a 1-point temporary buy-down or a seller-paid rate credit is worth more than an equal dollar cut in price when you are at the top of your ratio; a 15-year term raises the payment per dollar borrowed by about 40% and cuts the affordable price accordingly — choose it for the interest saving, not for the house. Rerun the calculator with the rate you are actually quoted, including points, before you set a search ceiling.

Down payment, PMI and the 20% question

Private mortgage insurance applies to conventional loans with less than 20% down and typically costs 0.3–1.5% of the loan a year depending on credit score and down payment; the calculator uses 0.6%. It counts inside your housing ratio, so a smaller down payment hits the budget twice: a bigger loan and an extra line on the payment.

Read the table from the cash column: 3% down on the price you can afford at $100k is about $9,085 in cash, while 20% is $76,724. If you have, say, $40,000, switch the calculator to dollar amount — the price it returns is usually higher than the 20%-of-price answer because PMI is cheaper than the house you would otherwise give up. Remember closing costs of 2–5% of the price on top, and keep 3–6 months of payments in reserve; lenders look for reserves on larger loans.

What lenders count as income (and what they don’t)

• Base salary and hourly wages at the current rate, verified by pay stubs and two years of W-2s.
• Overtime, bonus and commission: usually a two-year average, and only if it is likely to continue; a new job with a big bonus component counts for less than you think.
• Self-employment: the two-year average of net income from your tax returns, after the deductions you took — write-offs that lower your tax also lower your qualifying income.
• Rental income: typically 75% of the rent on a signed lease, minus the property’s own payment.
• Co-borrower income counts in full, and so do the co-borrower’s debts.
• Not counted: unemployment, most one-time payments, income that cannot be documented, and (for conventional loans) an allowance or gift unless it is a documented gift toward the down payment.

Debts that count against you include every payment on your credit report — car loans, student loans (lenders use the actual payment or 0.5–1% of the balance if it is deferred), minimum card payments, child support and alimony. Rent, utilities, phone and insurance do not count. Paying off a $350-a-month car loan before you apply can add about $60,000 of price when the back-end ratio is what binds.

Where your salary buys the median home

A budget only means something next to prices. At 6.25% with 20% down, the $383,620 that a $100k salary affords is above the median home value in 39 of 51 states and below it in the rest; it covers the median home in Chicago, Houston, Phoenix but not in New York or Los Angeles. The table shows the same check for six salary levels; the calculator does it live for yours and links each city to its home-values page with ZIP-level medians.

Compare two specific places with the relocation calculator, or check whether buying beats renting at your budget with the rent vs. buy tool. If the median in your city is out of reach, the usual moves are a longer commute, a smaller or older house, a co-borrower, or waiting while you clear debts — each of which you can test in the calculator in a few seconds.