How Much House Can You Afford in 2026?

Pre-approved for $650,000 does not mean you should buy a $650,000 house. Use our [Mortgage Calculator](/calculators/finance/mortgage-calculator) to find your comfortable number.

The Two Rules

Rule 1: The 28% Front-End Rule

Monthly housing costs (PITI) should stay under 28% of gross monthly income.

| Annual Income | Max Monthly Housing | Home Price at 7% / 20% down |

|---|---|---|

| $80,000 | $1,867 | ~$230,000 |

| $100,000 | $2,333 | ~$290,000 |

| $120,000 | $2,800 | ~$350,000 |

| $150,000 | $3,500 | ~$435,000 |

Rule 2: The 36% Back-End Rule

Housing plus all other monthly debt payments under 36% of gross income. Have $600/month in other debts on $100k income? Your home budget shrinks accordingly.

Use our [Debt-to-Income Calculator](/calculators/finance/debt-to-income-calculator) to see exact numbers.

Why 70% of Max Approval Is Smarter

Max approval (43% DTI) leaves:

No room for savings
One job loss from default
No budget for maintenance (1-2% of home value annually)

Conservative target: House payment under 22-25% of gross income.

2026 Rate Impact on $350,000 Loan

| Rate | Monthly P&I | 30-Year Total |

|---|---|---|

| 5.5% | $1,987 | $715,320 |

| 6.5% | $2,213 | $796,680 |

| 7.5% | $2,448 | $881,280 |

Every 1% rate increase costs $90,000+ over 30 years.

True First-Year Cost of Buying

| Item | Cost |

|---|---|

| Down payment (20%) | $70,000 |

| Closing costs (3-4%) | $10,500-$14,000 |

| Moving costs | $1,500-$5,000 |

| Immediate repairs/furniture | $5,000-$20,000 |

| Total Year 1 | $87,000-$109,000 |

Related Tools

[Closing Cost Calculator](/calculators/finance/closing-cost-calculator) — Total purchase costs
[Biweekly Mortgage Calculator](/calculators/finance/biweekly-mortgage-calculator) — Pay off years early
[PMI Removal Calculator](/calculators/finance/pmi-removal-calculator) — When you can drop PMI

How Much House Can You Afford in 2026? The Real Formula (Not What Lenders Say)