Find out exactly how much house you can afford based on your salary, monthly debts, and down payment. Uses the 28/36 rule lenders actually use. 2026 US rates.
How Lenders Calculate What You Can Afford
Your maximum loan approval isn’t random — it’s based on the 28/36 rule that virtually every conventional lender uses. The front-end ratio caps your total housing payment at 28% of gross monthly income. The back-end ratio caps all your debt payments at 36%.
What Goes Into PITI
Your “housing payment” for qualification purposes includes all four components of PITI: Principal (reduces your loan balance), Interest (cost of borrowing), Taxes (property tax escrowed monthly), and Insurance (homeowners insurance plus PMI if down payment is under 20%).
Why Existing Debt Destroys Buying Power
On a $90,000 salary, your 28% housing limit is $2,100/month. If you have a $600/month car payment and $200/month in student loan minimums, you’ve already used $800 of your 36% back-end limit ($2,700). That leaves only $1,900/month for housing — not the $2,100 the front-end alone would allow. Your effective buying power dropped by $30,000+ before even talking to a lender.
2026 Market Context
The FHFA conforming loan limit is $832,750. FHA loans allow 3.5% down with 580+ FICO. VA loans offer 0% down for eligible veterans and active military. First-time buyer programs vary by state — many offer $5,000–$25,000 in down payment assistance grants.
Once you know your target price range, use our Mortgage Calculator to see the exact monthly payment, full amortization schedule, and total interest paid. Average 30-year fixed rates are running 6.5%–7.0% for well-qualified borrowers.
Frequently Asked Questions
At $70,000/year the 28% rule allows $1,633/month for PITI. With 20% down, 6.75% rate, and typical taxes and insurance, that supports a home price around $230,000–$260,000. If you carry significant existing debt — say $400/month in car and student loan payments — your buying power drops further. Run your actual numbers in the calculator above — plug in your real monthly debt payments and see exactly how much buying power they're costing you.
Lenders tier rates by score. A 760+ FICO gets you the best advertised rates. At 720–759 you're still competitive. At 680–719 expect to pay 0.25%–0.5% more. Below 640 you're in FHA territory with higher rates and required MIP. Going from 680 to 760 on a $350,000 mortgage saves roughly $54,000 in total interest — worth spending 6–12 months building your score before applying.
The front-end ratio (28%) says your monthly housing costs — principal, interest, property taxes, and insurance (PITI) — should not exceed 28% of gross monthly income. The back-end ratio (36%) says all monthly debt payments combined should not exceed 36% of gross income. Most conventional lenders use these thresholds for approval. FHA loans allow up to 43% back-end DTI.
A lot more than most buyers expect. A $500/month car payment reduces your available housing budget by $500/month directly. At 6.75% on a 30-year mortgage, every $500/month of payment capacity translates to roughly $75,000 in purchase price. That car payment effectively cost you $75,000 in buying power. This is why paying off car loans or high-payment debt before buying a home can dramatically change what you qualify for.
The FHFA set the 2026 conforming loan limit at $832,750 for most US counties. High-cost areas like San Francisco, Los Angeles, New York City, and Washington DC have higher limits up to $1,249,125. Loans at or below the conforming limit qualify for conventional rates backed by Fannie Mae and Freddie Mac. Above that limit, you're in jumbo territory with typically 0.25%–0.5% higher rates.
