What each income can buy
Every row below uses the same assumptions: $40,000 down, $400 a month of car, student loan, or card payments, a 6.25% 30-year fixed rate, property tax at 0.9% of the price a year, $2,100 a year of homeowners insurance (an estimate), and mortgage insurance while the down payment is under 20%. Only the income changes.
| Household income | Home price | Monthly payment | Limit that applies |
|---|---|---|---|
| $50,000 | $169,575 | $1,100 | 36% total-debt limit |
| $75,000 | $250,955 | $1,750 | 28% housing limit |
| $100,000 | $330,604 | $2,333 | 28% housing limit |
| $125,000 | $410,252 | $2,917 | 28% housing limit |
| $150,000 | $489,901 | $3,500 | 28% housing limit |
Each income opens the calculator with that row's numbers, so you can swap in your own.
The rules lenders use
Lenders size a mortgage with two debt-to-income ratios, both measured against gross monthly income:
- Housing ratio: the full housing payment (principal, interest, property tax, insurance, mortgage insurance, and dues) divided by income.
- Total debt ratio: that payment plus every other monthly debt, divided by income.
The table uses the conservative rule of thumb of 28% for housing and 36% for all debt. Real limits are often higher. For loans it buys, Fannie Mae caps total debt at 36% of income when a loan is underwritten by hand, up to 45% for borrowers who meet its credit score and reserve requirements, and 50% when its automated system, Desktop Underwriter, approves the file. Freddie Mac's advice to buyers is that the housing payment should ideally stay under 30% of income and total debt under 45%.
What's in the payment
At $100,000 of income, the $330,604 home in the table breaks down like this:
| Part of the payment | Per month |
|---|---|
| Principal and interest on $290,604 | $1,789 |
| Property tax | $248 |
| Homeowners insurance | $175 |
| Mortgage insurance (under 20% down) | $121 |
| Total | $2,333 |
Taxes and insurance are about $423 of that each month, which is why a cheaper house in a high-tax county can cost as much a month as a pricier one elsewhere. The Mortgage Calculator shows the same payment with its full amortization schedule.
Comfortable vs. maximum
A lender approving you at a 45% total debt ratio, with no separate housing limit, would let the same $100,000 household reach about $469,000: $139,000 more house for $1,017 more a month, a payment of $3,350. The approval is a ceiling, not a budget. Your savings goals, child care, and commute costs don't appear in a debt-to-income ratio.
What moves the answer
Starting from the $100,000 example, here is how far each change moves the price:
| Change | Home price |
|---|---|
| $10,000 more down payment | +$8,976 |
| $200 a month less in other debts | No change |
| Half a point lower rate | +$13,340 |
| $10,000 more household income | +$31,859 |
Paying down other debts doesn't move the price at this income, because the 28% housing limit binds first. It starts to matter once other debts are large enough that the 36% total limit is the tighter one. The rate matters too. At the same $2,333 monthly budget, each half point changes the price by roughly $13,000:
| Rate | Home price |
|---|---|
| 5.25% | $358,198 |
| 5.75% | $343,944 |
| 6.25% | $330,604 |
| 6.75% | $318,117 |
| 7.25% | $306,427 |
Run your own numbers in the Home Affordability Calculator
Questions
- How much house can I afford on $100,000 a year?
- About $331,000 with $40,000 down, $400 a month of other debt, and a 6.25% rate, using the 28/36 rule. A lender allowing a 45% total debt ratio could approve about $469,000.
- Does a bigger down payment let me afford more?
- Yes. In the $100,000 example, $10,000 more down raises the price by about $9,000 at the same monthly budget: a little less than the extra cash, because a pricier home carries more property tax. Reaching 20% down also ends mortgage insurance, which frees more of the budget for the loan.
- Is the 28/36 rule what lenders actually use?
- It's a conservative rule of thumb, not a lender's limit. Fannie Mae, for example, allows total debt up to 36% of income on loans underwritten by hand, 45% with strong credit and reserves, and 50% through its automated underwriting.
Sources
- B3-6-02, Debt-to-Income Ratios, Fannie Mae Selling Guide, April 2, 2025 version.
- How Much Home Can I Afford?, Freddie Mac, My Home, last reviewed January 22, 2026.
Worked figures come from Keystone's calculators at today's default inputs, so they match the tools. They're educational estimates, not financial, tax, or lending advice. How we source and check them: editorial policy.