On a $100,000 salary you can afford a home of about $300,000, with a $40,000 down payment, a 30-year mortgage at 7.4% and no large monthly debts. That's what the 28/36 rule lenders use gives. Other debts, a bigger or smaller down payment, and the mortgage rate can move it by tens of thousands of dollars either way. Here's how it works, with the numbers.
To try your own figures, open the home affordability calculator with this example already filled in.
The short answer, step by step
$100,000 a year is $8,333 a month before tax. Under the 28/36 rule, your housing payment can be up to 28% of that: $2,333 a month. That payment has to cover more than the mortgage:
| Part of the monthly payment | Amount | Assumption |
|---|---|---|
| Principal and interest | $1,800 | $259,977 loan, 30 years at 7.4% |
| Property tax | $275 | 1.1% of the price a year |
| Home insurance | $150 | $1,800 a year |
| PMI | $108 | 0.5% of the loan a year, because $40,000 is under 20% down |
| Total | $2,333 | 28% of gross income |
The highest price whose total payment fits is $299,977: call it $300,000. 7.4% is Freddie Mac's average 30-year fixed rate for the week of 8 October 2026; your own quote may be higher or lower.
How lenders decide: debt-to-income ratios
- Front-end ratio (the "28"): housing costs as a share of gross monthly income.
- Back-end ratio (the "36"): housing plus every other monthly debt payment, such as car loans, student loans and credit card minimums.
28/36 is a traditional, fairly cautious guideline. Lenders' actual limits are often higher. Fannie Mae, whose rules many conventional mortgages follow, caps total debt-to-income at 36% for manually underwritten loans, up to 45% with strong credit and savings, and up to 50% for loans approved through its automated system.
How your other debts change it
With a 36% back-end limit, your housing payment can be at most $3,000 a month minus your other debt payments. Small debts don't matter, because the 28% limit is lower anyway; larger ones do.
| Other debt payments a month | Home you can afford | Monthly housing payment |
|---|---|---|
| $0 | $300,000 | $2,333 |
| $500 | $300,000 | $2,333 |
| $750 | $290,000 | $2,250 |
| $1,000 | $260,000 | $2,000 |
| $1,500 | $199,000 | $1,434 |
All with $40,000 down at 7.4%. A $600-a-month car payment and $400 of student loan payments together cost you about $40,000 of buying power. At $1,500 of debts the price falls so far that $40,000 is more than 20% down, so there's no PMI.
How the down payment changes it
| Down payment | Home you can afford | Share of the price |
|---|---|---|
| $10,000 | $273,000 | 3.7% |
| $20,000 | $282,000 | 7.1% |
| $40,000 | $300,000 | 13.3% |
| $60,000 | $318,000 | 18.9% |
| $80,000 | $349,000 | 22.9% |
Each extra $20,000 down adds about $18,000 to the price, because property tax rises with the price, until you pass 20% down. Then PMI disappears and the same monthly payment supports a bigger loan: going from $60,000 to $80,000 down adds about $31,000.
How the mortgage rate changes it
| 30-year rate | Home you can afford |
|---|---|
| 6.0% | $333,000 |
| 6.5% | $320,000 |
| 7.0% | $309,000 |
| 7.4% | $300,000 |
| 8.0% | $288,000 |
With $40,000 down and the same $2,333 payment. A 15-year mortgage at 6.73%, Freddie Mac's 15-year average the same week, buys about $251,000 for that payment, but you'd own the home in half the time.
Property tax matters too. At 0.5% of the price a year, the same payment stretches to about $319,000; at 2% it buys about $275,000. Check the rate for the county you're looking in.
What a lender might approve, and what's comfortable
If a lender accepts a 45% total debt-to-income ratio and you have $500 of other monthly debts, the numbers allow a home of about $411,000, with a $3,250 monthly payment. Before you aim that high, compare the payment with your take-home pay, not your salary:
- A single filer on $100,000 takes home about $6,598 a month in Texas or Florida, $6,193 in New York and $6,067 in California, before any 401(k) contributions.
- The 28% payment of $2,333 is 35% to 38% of that take-home pay.
- A $3,250 payment would be 49% to 54% of it.
The paycheck calculator works out your own take-home pay by state.
Costs the 28/36 rule doesn't include
- Closing costs: lender fees, title insurance and prepaid taxes are paid in cash on top of the down payment.
- Maintenance: many owners budget around 1% of the price a year, about $3,000 here.
- HOA dues, utilities, and furnishing a bigger home.
- An emergency fund: keep savings back after the down payment rather than putting everything into the house.
What PMI costs, and when it ends
Private mortgage insurance protects the lender when you put down less than 20%. Freddie Mac puts it at roughly $30 to $70 a month for every $100,000 borrowed, so $78 to $182 a month on a $260,000 loan; our example's $108 is in that range. On a conventional loan you can ask to cancel it once you have 20% equity, and it ends automatically when the balance is scheduled to reach 78% of the original value. Here, normal payments bring the balance to 80% of the price after about 6¾ years. Extra payments get you there sooner.
Work out your own number
- Divide your gross salary by 12 and take 28% and 36% of it.
- Add up your monthly debt payments and take them off the 36% figure. The lower of the two results is your maximum housing payment.
- Get a rate quote and your county's property tax rate.
- Enter it all in the affordability calculator, then check the full payment schedule in the mortgage calculator.
- Compare the payment with your take-home pay and decide how much room you want to leave.
Still deciding whether to buy at all? The rent vs buy calculator compares the two over time.
Figures from our affordability, mortgage and paycheck calculators with the assumptions shown. Sources: Freddie Mac Primary Mortgage Market Survey (week of 8 October 2026); Fannie Mae Selling Guide B3-6-02, "Debt-to-Income Ratios"; Freddie Mac "Breaking down PMI". Illustrations, not financial advice: lenders' rules, rates and taxes vary. Last reviewed October 2026.