Home Affordability Calculator 2026: How Much House Can You Afford?
The Key Numbers — 2026
How Much House Can You Afford — By Salary
Assuming 20% down payment, no existing debt, 6.8% interest rate, 30-year mortgage, $3,600/year property tax and $1,800/year insurance. This is the clean baseline:
| Annual Salary | Monthly Gross | Max Housing/mo (28%) | Max Home Price | Monthly Payment |
|---|---|---|---|---|
| $50,000 | $4,167 | $1,167 | $155,000 | $1,010/mo |
| $60,000 | $5,000 | $1,400 | $200,000 | $1,300/mo |
| $75,000 | $6,250 | $1,750 | $265,000 | $1,724/mo |
| $80,000 | $6,667 | $1,867 | $285,000 | $1,854/mo |
| $100,000 | $8,333 | $2,333 | $370,000 | $2,407/mo |
| $120,000 | $10,000 | $2,800 | $455,000 | $2,960/mo |
| $150,000 | $12,500 | $3,500 | $585,000 | $3,806/mo |
Assumes 20% down, no debt, 6.8% rate, 30yr term. Includes estimated tax and insurance.
A simple quick estimate: you can typically afford a home worth 3–4x your annual gross salary. On $80K that's $240K–$320K. On $120K that's $360K–$480K. This rough guide works well for people with little debt and standard down payments — but the 28/36 calculator gives you the precise number.
How Debt Destroys Your Home Buying Power
Each $200/month in existing debt (car, student loan, credit card) erases ~$29,000 in home buying power.
This is the part most buyers discover too late. Every dollar of monthly debt payment reduces your maximum home price by roughly $15,000–$18,000. Here's exactly what common debt loads do to a $100,000 salary buyer:
A $700/month combined debt load costs this buyer $125,000 in home buying power. That's often the difference between a starter home in a good neighbourhood and a great home in the same neighbourhood. Paying off debts before buying is almost always worth it.
Calculate your exact max home price
Enter your salary, debts, down payment and rate — see your exact DTI, PMI status and full monthly breakdown.
Open Affordability Calculator →The 28/36 Rule — What Lenders Actually Check
Front-end DTI (28%) covers just housing costs. Back-end DTI (36%) includes all monthly debt payments — the stricter limit lenders use.
Every conventional mortgage lender uses two DTI ratios to qualify you. Understanding both is essential:
Front-End DTI — The 28% Rule
Your total housing costs — Principal + Interest + Property Tax + Insurance + PMI + HOA — cannot exceed 28% of gross monthly income. On $8,333/month gross ($100K salary), the maximum housing payment is $2,333/month. This is the number the bank calculates first.
Back-End DTI — The 36% Rule
All monthly debt payments combined — housing PLUS car loans, student loans, credit cards, personal loans — cannot exceed 36% of gross income. On the same $100K salary, that's $3,000/month maximum total debt. If you already have $700/month in other debts, you only have $2,300/month left for housing — which cuts your max home price significantly.
While 36% is the traditional guideline, many lenders today approve up to 43% back-end DTI for conventional loans and up to 50% for FHA. However, approval at 43–50% DTI typically means higher interest rates, stricter income verification, and less room for error. Staying under 36% gives you the best rates and the easiest approval process.
PMI — The Hidden Cost That Changes Everything
If your down payment is below 20%, you pay Private Mortgage Insurance every month on top of your mortgage. PMI protects the lender — not you — and typically costs 0.5–1.5% of the loan amount annually. On a $300,000 loan that's $125–$375/month you're paying for zero benefit to yourself.
| Loan Amount | PMI Rate | Monthly PMI | Annual PMI | Total PMI (7 yrs to 20%) |
|---|---|---|---|---|
| $200,000 | 0.5% | $83/mo | $1,000/yr | $7,000 |
| $300,000 | 0.6% | $150/mo | $1,800/yr | $12,600 |
| $400,000 | 0.7% | $233/mo | $2,800/yr | $19,600 |
| $500,000 | 0.8% | $333/mo | $4,000/yr | $28,000 |
On a $400,000 loan with 10% down, PMI costs $233/month until you reach 20% equity — typically 7–9 years. That's $19,600 paid to the lender's insurance company before PMI is cancelled. This is why the 20% down target exists — it's not arbitrary, it's a hard cash saving.
When Can I Remove PMI?
PMI isn't permanent — federal law gives you two guaranteed paths to drop it, plus an option to request removal earlier than the automatic schedule. These rules come from the Homeowners Protection Act (HPA) and apply to most conventional loans (they don't apply to FHA loans, which use MIP with different rules).
- Automatic termination at 78% LTV. Your lender is required to automatically cancel PMI once your loan balance is scheduled to reach 78% of the home's original value — based on the original amortization schedule, regardless of extra payments — as long as you're current on payments. This is the "no action needed" backstop.
- Borrower-requested removal at 80% LTV. You can proactively request PMI cancellation once your loan balance drops to 80% of the home's original value (or current value, if it has appreciated). You typically need a good payment history and may need to pay for a new appraisal to confirm current value, especially if you're removing PMI early due to appreciation rather than paydown.
Home price: $400,000. Down payment: 10% ($40,000). Starting loan balance: $360,000 (90% LTV).
80% LTV (request removal): reached once the balance falls to $320,000 — that's $40,000 of principal paydown (plus any appreciation) beyond the down payment. On a 30-year loan this typically happens around year 4–5 of amortization, sooner if you make extra payments or the home's value has risen and an appraisal confirms it.
78% LTV (automatic termination): reached once the balance falls to $312,000, based purely on the original schedule — this happens automatically even if you never ask, typically a year or so after the 80% mark.
At roughly $233/month in PMI (0.7% annual rate on this loan size), reaching 80% LTV two years earlier than the automatic 78% cutoff — by paying extra toward principal or requesting an appraisal after the market rises — can save well over $1,000 in unnecessary PMI premiums.
To request early removal, contact your loan servicer in writing, ask what's required (often a written request, good payment history, and no other liens on the home), and be prepared to pay for an appraisal if your case relies on appreciation rather than scheduled paydown. If the servicer confirms you're at or below 80% LTV and you meet the payment history requirements, they're required to remove PMI.
Should You Buy Now or Save for 20% Down?
This is the most common dilemma for first-time buyers in 2026. Here's how to think through it:
- Buy with 10% down if: home prices in your area are rising fast (holding cash loses money to appreciation), your PMI rate is low, and you have stable income growth
- Wait for 20% if: the market is flat or falling, your PMI rate is high (above 0.8%), or you need 12+ months anyway to save — use that time to pay off debts too
- FHA at 3.5% down if: credit score is 580–679, you need to buy now, and the area has affordable prices — FHA has its own mortgage insurance (MIP) which can be less than PMI
- The maths: saving $50,000 more for down payment while paying $2,000/month rent for 2 years costs $48,000 in rent. The PMI you'd have paid is $4,000–$6,000. Saving is almost never worth it if you're in a hot market.
How Much House Can I Afford by Salary? (2026)
| Annual Salary | Max Home Price | Monthly Payment | 28% Rule Limit |
|---|---|---|---|
| $50,000 | $175,000–$190,000 | ~$1,150/mo | $1,167/mo |
| $60,000 | $210,000–$225,000 | ~$1,400/mo | $1,400/mo |
| $80,000 | $285,000–$300,000 | ~$1,867/mo | $1,867/mo |
| $100,000 | $355,000–$375,000 | ~$2,333/mo | $2,333/mo |
| $120,000 | $425,000–$450,000 | ~$2,800/mo | $2,800/mo |
| $150,000 | $530,000–$560,000 | ~$3,500/mo | $3,500/mo |
Assumes 20% down payment, 6.8% interest rate, no existing debt, 30-year fixed mortgage. Includes estimated taxes and insurance.