How much mortgage can I afford?

From your income to the most you can pay each month, the loan that payment can support and the home price it adds up to. And what stops you first.

Mortgage you can afford

$300,000

for a home of up to $375,000, before closing costs

Payment $1,896.20 a month
Home up to $375,000
Loan = 3.1× your yearly income

With $8,000 a month before tax and a 36% limit, you could put up to $1,980.00 a month toward the loan, enough for about $313,257 at 6.5% over 30 years.

But what stops you first is the down payment. If the lender lends at most 80% of the price, $75,000 covers a home of up to $375,000. The loan tops out at $300,000, with a payment of $1,896.20 a month.

Your home payment, with tax and insurance, would take 30% of your income. That’s above the 28% of the classic rule of thumb, but within the 28% to 35% the CFPB suggests.

How you’d pay for the home

Loan$300,00080%
Down payment$75,00020%

I’m not an accountant or a financial advisor. This is an estimate, for information only. Check with a professional before you decide.

Your numbers

example: change the numbers

Currency

This changes the symbol and the examples. It does not convert your numbers.

Gross monthly income

Before tax, the way US lenders count it. Buying with someone? Add both incomes.

Other monthly debt payments

Car and student loans, minimum credit card payments, child support. Don’t include rent, since it stops when you buy.

Monthly property tax and insurance

Lenders count them in your home payment, along with HOA dues and mortgage insurance if you’ll have them. In the UK: council tax, buildings insurance and any service charge.

Debt-to-income limit

The share of gross income that all your debt payments may take, including the new home. 36% is the classic rule of thumb; some lenders go up to 43% or higher.

Interest rate

The yearly rate on the loans you’re looking at.

Loan term

More years: a lower payment and a bigger loan, but more interest.

Down payment

Savings you’ll put toward the price. Keep closing costs separate: they come on top. In the UK: your deposit.

Largest loan, as a share of the price

The loan-to-value ratio the lender allows. 80% means 20% down, which avoids private mortgage insurance on a conventional loan; many loans allow as little as 3% down.

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The math, step by step
	36% of your gross income of $8,000	$2,880.00
−	Other debt payments	$400.00
−	Property tax and insurance	$500.00
=	Most you can pay toward the loanprincipal and interest	$1,980.00
	Loan that payment supports (30 years at 6.5%)	$313,257.42
+	Down payment	$75,000.00
=	Home price, counting only the payment	$388,257.42
	Home price, counting only the down paymentthe lender lends at most 80% of the price; your down payment covers the rest	$375,000.00
=	Home price you can afford (the lower of the two)with a loan of $300,000.00	$375,000.00

How it works

Start with your gross monthly income and the share of it that all your debt payments may take. The classic US rule of thumb is 28/36: up to 28% of gross income for the home payment and 36% for all debts together. The CFPB puts it as 28% to 35% for the mortgage and 36% or less in total, and notes that some lenders go up to 43% or higher.
Subtract the debts you already pay and the property tax and insurance that come with the home, since lenders count them in the housing payment (Fannie Mae’s rules call it PITIA, which adds association dues). What’s left is the most you can pay toward the loan itself: principal and interest.
Turn that payment into a loan with the mortgage formula read backward: loan = payment × (1 − (1 + r)^−n) ÷ r, where r is the monthly rate (yearly rate ÷ 12) and n is the number of payments. Add your down payment, and you get the price the payment allows.
The down payment sets a second ceiling. If the lender lends at most 80% of the price, your down payment has to cover the other 20%, so the price can’t go above down payment ÷ 20%. The home you can afford is the lower of the two, and the result tells you which one stops you.

Worked example

$8,000 a month before tax with a 36% limit gives $2,880. Subtracting $400 of other debts and $500 of property tax and insurance leaves $1,980 a month for the loan. At 6.5% for 30 years, that supports $313,257.42, so with $75,000 down, the payment would allow a $388,257 home. But if the lender lends at most 80%, $75,000 covers a home of up to $375,000, so the down payment stops you first. Loan $300,000, payment $1,896.20, or $2,396.20 with tax and insurance: 30% of your income for the home, 35% for all your debts.

Sources

Text checked on September 30, 2026

Good to know

This is an estimate from rules of thumb, not a loan offer. Lenders also look at your credit, your savings, your job and the home itself, and each one sets its own limits.
Keep closing costs separate from your down payment: the CFPB says they typically run 2% to 5% of the price.
The most you can borrow isn’t the same as what feels comfortable every month. Try a lower limit and compare.
The payment assumes a fixed rate. With an adjustable-rate mortgage (a variable or tracker rate in the UK), it can rise later, and so can the share of your income it takes.
In the UK, lenders look at your income, your outgoings and how secure your job is, and typically cap the loan at four and a half times your yearly income; most people are offered less. The chip above shows your multiple.

Frequently asked questions

What is the 28/36 rule?

A lenders’ rule of thumb: spend no more than 28% of your gross monthly income on the home payment (principal, interest, property tax and insurance) and no more than 36% on all your debt payments together. It isn’t a law: some lenders accept more, and your own budget may need less.

Do lenders go by gross income or take-home pay?

In the US, gross income: what you earn before taxes and other deductions. That’s why the percentages can look generous next to your paycheck. If you’d rather plan on take-home pay, lower the limit.

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

That’s about $8,333 a month. With a 36% limit, $500 a month of property tax and insurance and no other debts, you could put $2,500 a month toward the loan: at 6.5% over 30 years, that’s a loan of about $395,500, plus your down payment. With a $400 car payment, it drops to about $332,200. Try your own numbers above.

How much of a down payment do I need?

In the US, usually at least 3% of the price, and some programs for veterans, rural buyers and some first-time buyers ask for little or nothing. With less than 20% down on a conventional loan, you’ll likely pay private mortgage insurance. In the UK, most mortgages ask for a deposit of at least 5% to 10%.

How do UK lenders decide how much I can borrow?

They look at your income, your outgoings and how secure your job is, and work out a loan-to-income ratio: typically they cap the loan at four and a half times your yearly income, and most people are offered less. The Bank of England also limits how many new mortgages can be at 4.5 times income or more.

Does the loan term change how much I can borrow?

Yes. The same payment pays off a bigger loan over more years. At 6.5%, $1,980 a month supports about $313,257 over 30 years but only about $227,297 over 15. More years also means paying a lot more interest.