How Much House Can I Afford? (2026 Calculator Guide)
March 2026 · 8 min read
Quick Answer
A common guideline is to spend no more than 28% of gross monthly income on housing. On a $6,000/month income that is $1,680/month for housing. With a 20% down payment and 6.5% rate that buys roughly a $250,000 home.
How Much House Can You Afford by Income
These estimates use the 28% rule with a 6.5% interest rate, 20% down payment and 30-year term.
| Annual Income | Max Monthly Payment | Estimated Home Price |
|---|---|---|
| $40,000 | $933 | $130,000 |
| $60,000 | $1,400 | $195,000 |
| $80,000 | $1,867 | $260,000 |
| $100,000 | $2,333 | $325,000 |
| $120,000 | $2,800 | $390,000 |
| $150,000 | $3,500 | $490,000 |
Hidden Costs of Homeownership
Many first-time buyers focus only on the mortgage payment and forget these additional costs. Property taxes average 1-2% of home value per year. Homeowners insurance costs $100-200 per month. Maintenance and repairs average 1% of home value per year. HOA fees where applicable add $200-500 per month. PMI if your down payment is under 20% adds $100-200 per month. Budget for all of these when calculating what you can truly afford.
The True Cost of Waiting to Buy
Many renters wait for the perfect time to buy but home prices and rents historically rise over time. A $300,000 home that appreciates 3% per year is worth $348,000 in five years. The down payment you need grows with the price. Waiting has a real financial cost that is easy to underestimate.
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Try the Mortgage Calculator →Frequently Asked Questions
What is the 28/36 rule for buying a house?
The 28/36 rule says housing costs should not exceed 28% of gross monthly income and total debt payments should not exceed 36%. These are guidelines used by most lenders to qualify borrowers.
How much do I need for a down payment?
Conventional loans require 3-20% down. FHA loans require 3.5% with a 580+ credit score. A 20% down payment eliminates PMI saving $100-200 per month. VA and USDA loans offer zero down for eligible buyers.
What income do I need to buy a $300,000 house?
To comfortably afford a $300,000 home with a 20% down payment you need roughly $60,000-70,000 annual income. This keeps housing costs near the 28% guideline at current interest rates.
Should I buy or rent in 2026?
Buying makes sense if you plan to stay 5+ years, have a stable income and can afford the down payment and closing costs without depleting savings. Use the price-to-rent ratio — if home prices are over 20x annual rent renting may be smarter.
What are closing costs when buying a house?
Closing costs are typically 2-5% of the purchase price. On a $300,000 home expect $6,000-15,000 in closing costs including lender fees, title insurance, appraisal and prepaid taxes and insurance.