How Much House Can I Afford?
Estimate a comfortable housing budget using income, recurring debts, upfront cash, and complete ownership costs.
A planning limit based on $8,000 gross monthly income
The 28% figure is only a planning assumption. The $2,240 must cover the full housing payment, and personal budgets or lender standards may require a different limit.
Start with the monthly budget
Choose a housing payment that still leaves room for taxes, food, transportation, healthcare, savings, and lifestyle priorities. Subtract recurring debt payments before deciding what feels sustainable. A lender's approval can be higher or lower than your personal comfort level.
- Include principal, interest, property tax, insurance, HOA dues, and mortgage insurance.
- Keep an emergency reserve after closing.
- Budget separately for maintenance, utilities, and repairs.
Then calculate the purchase price
Enter a possible home price, down payment, APR, term, tax, and insurance into the mortgage calculator. Adjust the price until the full monthly estimate fits your chosen limit. Repeat with a slightly higher rate or ownership cost to see how much margin remains.
Cash needed is a separate constraint
A monthly payment can look affordable while the transaction still requires more cash than expected. Account for the down payment, closing costs, moving, immediate repairs, and the reserves you want to keep after closing.
Frequently asked questions
Is the 28% example a rule?
No. It is a commonly used starting assumption, not a universal recommendation or approval standard.
Should I include future income?
Base the core plan on dependable income. Treat uncertain bonuses or future raises as extra margin rather than required support for the payment.