How Much House Can I Afford? The 28/36 Rule (2026)

Updated November 2026. How much house you can afford, worked out with the 28/36 rule, a full example at four income levels, and the costs people forget. Figures from Fannie Mae, Freddie Mac (October 29, 2026), NAR, HUD and the CFPB.

You can usually afford a house whose full monthly payment stays near 28% of your gross income, with all debts under 36%, the 28/36 guideline Fannie Mae describes. On $100,000 a year, that’s about $2,333 a month for housing. At Freddie Mac’s October 29, 2026 average of 7.24%, that’s roughly a $317,900 home with 20% down.

Want to run your own numbers? Beycome’s free home buying calculators do the math in a minute.

Jump to: 📏 The 28/36 rule · 🧮 Worked example · 📊 By income · 🤝 What lenders allow · 🏠 Forgotten costs · ⏱️ Are you ready? · ❓ FAQ

“How much house can I afford?” has two answers: what a lender will approve, and what you can live with. They’re rarely the same number. This page works out the second one first, then shows where lenders draw the line.

What is the 28/36 rule for buying a house?

It’s a two-part limit. Fannie Mae’s homebuyer glossary describes it as a guideline with a maximum housing expense-to-income ratio of 28% and a maximum total debt-to-income ratio of 36%. Both ratios use gross income, before taxes.

• The 28 (front end): principal, interest, property taxes, homeowners insurance, mortgage insurance and any HOA dues.
• The 36 (back end): that same housing payment plus car loans, student loans, card minimums and other debts.

You’re limited by whichever number is lower. In high-cost markets the gap gets wide fast; here’s how much money you need to buy a house in San Diego. Freddie Mac’s homebuyer budget guide uses a close cousin, 30% for the mortgage payment and 36% for total debt. Either way, the idea is the same: keep enough income free for everything else.

How much house can I afford on $100,000 a year?

Here’s the math, step by step, for a household earning $100,000 with no other debts.

1. Monthly gross income: $100,000 ÷ 12 = $8,333.
2. Front-end cap: 28% of $8,333 = $2,333 for the whole housing payment.
3. Back-end check: 36% of $8,333 = $3,000 for all debts. With no other debts, the $2,333 cap wins.
4. Taxes and insurance: we assume $600 a month. Yours could be far more, so get real quotes.
5. Left for principal and interest: $2,333 − $600 = $1,733.
6. Loan that payment supports at 7.24% over 30 years: about $254,000.
7. With 20% down, the price is about $318,000, with roughly $64,000 down.

Now add a $500 car payment and $400 of student loans. The back end drops to $3,000 − $900 = $2,100 for housing, so principal and interest fall to $1,500. That supports about a $220,000 loan, or a $275,000 home with 20% down. Debts cost you about $43,000 of buying power in this example.

Less than 20% down changes it again. With FHA’s 3.5% minimum, the annual mortgage insurance premium of 0.55% (HUD, 2023) eats part of the payment. The same $2,333 budget supports about a $238,000 loan and a $247,000 home, with about $8,600 down. You buy a cheaper house, but you need far less cash.

How much house can I afford by income?

Same assumptions for every row: 28% front-end ratio, no other debts, $600 a month for taxes and insurance, Freddie Mac’s 7.24% average 30-year rate.

Against NAR’s $417,500 national median for September 2026, you’d need about $123,000 of income and 20% down to stay inside 28/36 at today’s rates. That gap is why so many buyers stretch past the rule, or wait. Lower taxes and insurance, a lower rate, or a seller credit all move these numbers. The 15-year vs 30-year comparison shows how the term changes the payment.

How much will a lender let me borrow?

Often more than 28/36. Fannie Mae’s Selling Guide caps total debt-to-income at 36% on manually underwritten loans, allows up to 45% with strong credit and reserves, and goes to 50% for files run through its Desktop Underwriter system. The CFPB defines the ratio the same way: all monthly debt payments divided by gross monthly income.

Approval at 45% doesn’t mean comfort at 45%. That’s 45 cents of every pre-tax dollar going to debt, before groceries, childcare or savings. Use the lender’s number as a ceiling, not a target.

Get a pre-approval before you tour. The lender checks income, debts and credit and says what it will lend; our guide to what it means to be pre-approved for a mortgage explains the letter. Credit not where you want it? Read ways to buy a home with bad credit and little cash.

How much do you need for a down payment?

Less than most people think. An FHA loan allows 3.5% of the price (HUD). Fannie Mae’s HomeReady allows as little as 3%, with gifts and grants allowed. First-time buyers put a median 10% down in NAR’s 2025 Profile.

Under 20% on a conventional loan, you’ll usually pay private mortgage insurance, which protects the lender, not you. It ends once you reach enough equity. Our guide to the minimum down payment compares the options, and how to buy a house with cash covers the other extreme.

What costs do people forget when figuring affordability?

The monthly payment is only part of it. Plan for these too:

• Closing costs: appraisal, title insurance, lender fees and prepaid items. The CFPB’s guide to what closing costs are explains each line.
• Earnest money and the inspection, paid before closing.
• Moving, utilities and the first furniture run.
• Repairs: something will break in year one.
• HOA dues and special assessments, if you buy a condo or in a planned community.
• A cash cushion, so a surprise bill doesn’t go on a card.

Our guide to building cash reserves for homeownership suggests how much to keep back. Before you buy, have the home inspected, appliances included; inspecting pre-installed appliances shows what to check.

Here’s one cost you can lower. Beycome’s buyer program is open to every buyer on homes listed by other agents, with no upfront fee. Beycome keeps 1% of the price (minimum $1,499) and credits the rest of the buyer-agent commission at closing, with lender approval. On a $400,000 home with 3% offered to the buyer’s agent, you’d get $8,000 back. Rules on buyer credits vary by state. The credit can’t apply where no buyer-agent commission is offered, like most FSBO homes, or on homes listed by Beycome sellers.

The 3% figure is an example only. Commissions are not set by law or NAR rules and are negotiable. Sellers choose whether to offer any buyer-agent compensation, and since August 17, 2024 such offers can’t be shown on the MLS. Learn more in what buyer’s agent commission is and why it matters.

Are you ready to buy, not just able to?

Affording the payment is one test. Four more matter.

How long will you stay? You pay closing costs to buy and selling costs to leave. With prices up just 1.3% in a year nationally (NAR, September 2026), a two-year stay may not cover both. Five years or more also helps you meet the IRS 2-out-of-5-year test if you later sell and want to exclude the gain. If plans are shaky, read renting vs buying mid-career.

Can you handle repairs? A running toilet is a quick fix if you’re handy. A failed water heater means a pro. If you’re not handy, lean toward a newer home or recent updates to the roof, HVAC and water heater, and ask for receipts.

Could the house earn its keep later? A home you could rent out gives you options. Our guide on renting out your first home when you buy a second explains how that works, and keeping an apartment ready for rent covers the landlord side.

Does the lifestyle fit? A move to the suburbs may mean a second car. Weekends fill with yard work. First-time buyers are now 40 at the median, per NAR’s 2025 Profile, partly because saving takes time. There’s no wrong age, only a plan that fits.

Mostly yes? Our smart buyer’s guide to buying a house covers the steps, and buying from an owner explains FSBO purchases. Selling a home first? See getting your house ready to sell and how to prepare your property for sale, or discover how Beycome works for sellers and buyers.

How much house can I afford: questions