How much house can I afford?
Reviewed August 2026
There are two different answers to this question: what a lender will approve you for, and what you can comfortably live with. They're often far apart — and the gap is where buyer's remorse lives.
What lenders look at: the 28/36 rule
Lenders size your loan using debt-to-income (DTI) ratios against your gross (pre-tax) income. The classic guideline is 28/36: your housing payment stays at or below 28% of gross monthly income, and your total debt (housing plus car loans, student loans, credit cards) stays at or below 36%.
In practice conventional loans routinely approve total DTI up to 43%–45%, and sometimes ~50% with strong credit and reserves. That's the 'bank max' — the ceiling, not the target.
Why take-home pay is the better yardstick
The bank ignores taxes, but you don't live on gross income — you live on take-home. A more sustainable target keeps your housing payment around 25% of your take-home pay, which leaves room for retirement savings, emergencies, and a life.
That's why the same salary supports a bigger comfortable budget in a no-income-tax state than in a high-tax one, even though the bank's number is identical.
What moves your number
Four levers change how much house you can afford:
- Income — more gross income raises both the bank max and your comfortable budget.
- Debts — every $100/mo of debt payments directly lowers what's left for housing.
- Down payment — a bigger down payment means a smaller loan and lower monthly payment.
- Interest rate — a 1-point rate change can swing your buying power by roughly 10%.
Frequently asked
What salary do I need to buy a $400,000 house?
As a rough guide, with ~10% down and average rates you'd want roughly $90,000–$110,000 in household income to keep the payment within a healthy share of take-home, less if you have no other debt. Use an affordability calculator with your real numbers.
Should I borrow the maximum the bank offers?
Usually no. The bank's maximum is based on gross income and ignores taxes, retirement savings, and lifestyle. Most buyers are happier targeting ~25% of take-home pay for housing.