2.5× – 4×
Your Annual Income
Most people can afford a home priced at roughly 2.5× to 4× their gross annual income. The exact number depends on your existing debt, the interest rate you qualify for, your down payment, and local property taxes.
This is a widely used starting point — but your real affordability comes down to what you can comfortably pay each month, not just the sticker price.
Calculate Your Home Affordability →The ranges above are general guidelines. For a number tailored to your finances, use our Home Affordability Calculator. It factors in your income, monthly debts, down payment, and current interest rates to estimate the maximum home price you can afford.
Takes about 30 seconds — no signup required.
Open Home Affordability Calculator →These estimates assume a 7% interest rate, 20% down payment, and moderate existing debt. Your actual range may be higher or lower.
| Annual Income | Affordable Home Price | Est. Monthly Payment |
|---|---|---|
| $50,000 | $125K – $200K | $660 – $1,064 |
| $60,000 | $150K – $240K | $798 – $1,277 |
| $75,000 | $187K – $300K | $995 – $1,597 |
| $80,000 | $200K – $320K | $1,064 – $1,703 |
| $100,000 | $250K – $400K | $1,330 – $2,129 |
| $125,000 | $312K – $500K | $1,662 – $2,661 |
| $150,000 | $375K – $600K | $1,996 – $3,194 |
| $200,000 | $500K – $800K | $2,661 – $4,258 |
Note: Monthly payment estimates cover principal and interest only on the borrowed amount (80% of home price) at 7% over 30 years. Actual costs include property tax, insurance, and potentially PMI.
Two homes listed at $350,000 can have completely different monthly costs depending on the interest rate, down payment, and loan term. Affordability isn't about the listing price — it's about whether the monthly payment fits your budget.
Here's how the same $350,000 home price results in different monthly P&I payments:
| Rate | Down Payment | Loan Amount | Monthly P&I |
|---|---|---|---|
| 7% | 5% ($17,500) | $332,500 | $2,212 |
| 7% | 20% ($70,000) | $280,000 | $1,863 |
| 6% | 20% ($70,000) | $280,000 | $1,679 |
| 7% | 20% ($70,000) | $280,000 (15yr) | $2,517 |
The difference between the highest and lowest payment here is $533/month — on the exact same house. That's why running your own numbers matters. Use the mortgage calculator to compare scenarios side by side.
Once you have a price range in mind, see what the actual monthly payment looks like. Each page below breaks down payments by rate, down payment, and loan term.
Browse all 37 price points from $100K to $1M on the Mortgage & Real Estate hub.
A widely used guideline is the 28% rule — your monthly mortgage payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. For a $300,000 home at 7% with 20% down, you'd need roughly $68,000–$75,000 in gross annual income.
Use the Home Affordability Calculator to check your specific income against current rates.
The 28/36 rule is a lending guideline with two parts. 28% (front-end ratio): your total housing costs should stay below 28% of gross monthly income. 36% (back-end ratio): your total debt payments — including mortgage, car loans, student loans, and credit cards — should stay below 36%.
Some lenders allow ratios up to 43% or higher for borrowers with strong credit, but staying within 28/36 gives you the most comfortable payment.
Every dollar of existing monthly debt reduces the mortgage payment a lender will approve. A $500/month car payment on an $80,000 income drops your max approved home price by roughly $75,000–$85,000. Lenders evaluate your debt-to-income ratio — if total debts exceed 43% of gross income, most conventional loans are off the table.
Yes, but expect a higher monthly payment. FHA loans allow as little as 3.5% down, and some conventional programs allow 3–5%. The trade-off is that anything below 20% requires private mortgage insurance (PMI), which adds $100–$400+/month depending on loan size and credit score. PMI typically drops off once you reach 20% equity.
On a $100,000 annual salary with moderate debt, you can generally afford a home priced between $250,000 and $400,000. The range depends on your down payment, interest rate, and existing monthly obligations. With 20% down and a 7% rate, a $350K home would cost about $1,863/month in principal and interest.
See the full breakdown: $300K mortgage payment | $400K mortgage payment