How Much House Can I Afford? The 28/36 Rule Math

Ask a lender how much house you can afford and you get an approval amount. Ask a budget and you get a smaller number. The gap between those two figures is where most regret lives, and the 28/36 rule is the fastest way to find your own line before anyone else draws it for you.

We ran the rule across ten states, six salaries, eight interest rates, and six levels of existing debt, all at this week’s mortgage rate. Short video first, then the math.

1. The 28/36 Rule in One Line

Quick Answer: The 28/36 rule says your total housing payment should stay at or below 28% of gross monthly income, and housing plus every other debt payment should stay at or below 36%. Both numbers use income before taxes. The lower of the two limits is the one that controls your budget.

The rule has two halves, and people usually remember only the first one.

• The 28% front-end limit. Covers the full housing payment: principal, interest, property taxes, homeowners insurance, mortgage insurance, and any HOA dues.
• The 36% back-end limit. Covers that housing payment plus car loans, student loans, credit card minimums, and any other monthly debt on your credit report.
• Gross, not net. Both percentages apply to pay before taxes and deductions, the same way lenders measure it.

On an $80,000 salary, gross monthly income is $6,667. The 28% line lands at $1,867 for housing and the 36% line at $2,400 for all debt. That is the whole formula. It works the same way as the debt-to-income ratio lenders calculate, just with stricter cutoffs.

2. How to Run the 28/36 Math on Your Own Paycheck

Quick Answer: Divide your yearly gross income by 12, multiply by 0.28 for the housing cap and 0.36 for the total-debt cap, subtract your current monthly debts from the 36% figure, and use the smaller result as your maximum housing payment. Four steps, no calculator needed beyond your phone.

How to calculate how much house you can afford with the 28/36 rule

Use gross pay from your most recent pay stubs or last year’s W-2, and use the same debts a lender would see on your credit report.

1. Find gross monthly income. Yearly salary divided by 12. Two earners? Add both. A $100,000 household has $8,333 a month.
2. Set the 28% housing cap. $8,333 × 0.28 = $2,333. That is the most the whole housing payment should be.
3. Set the 36% total-debt cap and subtract existing debt. $8,333 × 0.36 = $3,000. With a $450 car payment and $250 in student loans, $3,000 − $700 = $2,300 left for housing.
4. Take the lower number. $2,300 beats $2,333, so $2,300 is the budget. Then back into a price using today’s rate, your down payment, and local taxes.

Step four is where most guides stop, so the sections below do that conversion for you. To plug in your own numbers, our mortgage calculator with taxes and insurance runs the same math.

3. What the 28% Rule Buys a Median Household in 10 States

Quick Answer: At 6.76% with 10% down, a median-income household in California can afford about $321,500 of house under the 28% rule, while the same household in Ohio tops out near $208,800. Property tax rates swing the answer by tens of thousands of dollars between states with similar incomes.

Income sets the payment. Property tax decides how much house that payment buys. We used 2024 Census median household income, the Tax Foundation’s effective property tax rate for each state, and the Freddie Mac 30-year rate of 6.76% published September 10, 2026.

Look at Illinois against Georgia. Illinois households earn about $3,200 more a year, yet the 28% rule buys them roughly $19,500 less house, because a 1.88% property tax eats the payment a 0.79% rate leaves alone. Texas sits in the same trap. That is why our loan guides run affordability by state, never by a national average.

4. Maximum Home Price by Salary at Today’s Rate

Quick Answer: Under the 28/36 rule at 6.76% with 10% down, a $50,000 income supports roughly a $144,000 home, $75,000 supports about $227,000, and $100,000 supports about $310,000. Each extra $25,000 of salary adds close to $80,000 of purchasing power, as long as other debt stays low.

This ladder uses a 1.0% property tax rate so it is not tied to any one state. Swap in your own rate from the table above and the numbers shift by a few percent.

Notice the “room for other debt” column. It is only 8% of gross income, and a single car payment can use all of it. Every dollar of debt above that column comes straight out of the housing budget. The credit score you bring to the lender changes the rate, and the rate changes every row here.

5. How the Mortgage Rate Moves Your Number

Quick Answer: For a $100,000 household holding its housing payment at the 28% line, every full point of mortgage rate is worth about $27,000 of home price. At 5% the same $2,333 payment reaches $361,500; at 8% it reaches $279,500. Rates change what you can afford faster than raises do.

Nothing in the 28/36 rule changes when rates move, but the price the rule reaches does. Here is the same $2,333 payment converted to a home price across eight rates, with the current Freddie Mac average marked.

This is why a buyer priced out in one year can be back in the market the next without a raise. It is also the case for a shorter loan: the 15-year versus 30-year mortgage math trades a lower rate for a much higher payment, which pushes the 28% line down hard.

6. How Car and Student Payments Shrink the Budget

Quick Answer: For a $100,000 household, other debt up to $667 a month costs nothing under the 28/36 rule because the 28% cap binds first. Above that, every $100 of monthly debt removes roughly $14,000 of home price. A $1,500 car-plus-loans total cuts the budget from $309,600 to $191,400.

The two halves of the rule hand off to each other at a specific point. Below it, your existing bills are invisible. Above it, they control everything.

The handoff sits at $667 for this household — exactly 8% of gross income. Paying off a $400 car loan before applying does nothing if other debt is already under that line, but it restores about $56,000 of price if you are above it. Carrying education debt? Read how lenders count student loans on a mortgage, because deferred and income-driven loans are often counted at more than the payment you actually make.

7. 28/36 vs What Lenders Actually Allow

Quick Answer: Lenders will go well past 28/36. FHA’s benchmark is 31/43, Fannie Mae’s automated system approves up to 50% total debt, and the old federal 43% cap no longer applies to most loans. So how much house can I afford by the lender’s math? Often 20% to 40% more than the 28/36 rule says — which is the problem.

The rule is conservative on purpose. Here is how it compares to the ceilings actually used in underwriting.

The sources are public. HUD’s Single Family Housing Policy Handbook 4000.1 sets FHA’s 31% and 43% benchmarks. Fannie Mae’s Selling Guide B3-6-02 caps manually underwritten loans at 36% (45% with strong credit and reserves) and Desktop Underwriter files at 50%. The 43% figure people still quote came from the CFPB’s original qualified mortgage rule, which the General QM final rule replaced with a price-based test.

None of those ceilings measure what is left after the mortgage: childcare, retirement savings, a car that will need replacing. DTI counts only fixed debts, which is exactly why the lender’s number runs high.

8. Why the Pre-Approval Amount Is Not Your Number

Quick Answer: A pre-approval tells you the most a lender will lend, using the 43% to 50% ceilings above and ignoring everything you spend that is not a debt. Use it to shop with credibility, then buy at the 28/36 figure. The gap between the two is your margin for a rate reset, a job change, or a new baby.

Three things the letter leaves out:

• Taxes and insurance that rise. Property reassessments and homeowners insurance premiums move every year. Your 28% line does not move with them.
• Spending that is not debt. Daycare, a 401(k) match, groceries, and a repair fund are invisible to DTI. A budget sees them.
• The next rate. A pre-approval built at 6.76% does not survive a lock at 7.25%. Section 5 shows what that costs.

A pre-qualification is an estimate from numbers you type in; a pre-approval is checked against documents. Our guide to pre-approval vs pre-qualification and what lenders mean by each covers which one sellers take seriously. Either way, the letter is the top of the range and the 28/36 result is the target. Still deciding whether buying beats renting at that price? Run the rent-versus-buy math with your actual 28% payment.

9. The Bottom Line

Quick Answer: How much house can I afford comes down to one payment: 28% of gross monthly income, or 36% minus your other debts, whichever is smaller. At 6.76% with 10% down, that is roughly three times household income in a low-tax state and closer to 2.8 times in a high-tax one.

Our verdict: use the 28/36 rule as your buying limit and the lender’s DTI ceiling as nothing more than proof you can close. The rule already flexes for the three things that change your answer: the mortgage rate, your county’s property tax, and the car and student payments you carry in.

Run it with today’s numbers, then again every time one of those inputs moves. At DollarVisor, that is the whole method: state-level numbers, the math shown, no sponsored rankings. If any term above was new, start with how a mortgage works from first payment to last.

10. Frequently Asked Questions

1. How much house can I afford on $80,000 a year?

Under the 28/36 rule, $80,000 gives you $1,867 a month for housing. At 6.76% with 10% down and a 1.0% property tax, that reaches a home price of about $243,000 with no other debt. Add $700 in car and student loan payments and the 36% cap takes over, trimming the budget to roughly $220,000.

2. Is the 28/36 rule based on gross or net income?

Gross income, before taxes and deductions. Lenders use the same base. That means the 28% figure feels bigger on paper than it does in your checking account, which is one reason the rule is meant as a ceiling rather than a target.

3. Does the 28% include property taxes and insurance?

Yes. The 28% covers the whole housing payment: principal, interest, property taxes, homeowners insurance, mortgage insurance if you put less than 20% down, and HOA dues. Leaving taxes and insurance out is the most common way people overstate what they can afford.

4. Can a lender approve me above 36%?

Yes. FHA’s benchmark is 43% total debt, and Fannie Mae’s automated underwriting allows up to 50%. Approval at those levels is routine. The 28/36 rule is stricter by design, so a lender saying yes does not mean the payment fits your budget.

5. What if my rent is already more than 28% of my income?

You are not alone, and it does not mean you cannot buy. It means a mortgage payment equal to your rent already breaks the rule, so aim for a purchase price that brings the full housing payment back under 28%, or raise the down payment to shrink the loan. Paying the same amount for a mortgage as for rent is not automatically affordable.