How much house can I afford?

What you can get pre-approved for and what you can actually live with are two different numbers. As an independent mortgage broker, I run this math daily with first-time buyers, and the gap between a lender's ceiling and a comfortable budget is wider than most people expect. Here's the framework I use to help clients land on their right figure — not just the maximum one.

The most common shortcut is the 28/36 rule: a budgeting guideline that says no more than 28% of your gross monthly income should go to housing costs, and no more than 36% should go to all your debts combined. It's a rule of thumb, not a legal requirement — but it's the cleanest way to estimate affordability before you ever talk to a lender.

How the 28/36 rule sets your budget

Start with your gross monthly income — what you're paid before taxes, health insurance, or retirement contributions come out. The rule splits that income into two checks: your housing payment should stay under 28%, and your total debt (housing plus car, student, and credit card payments) should stay under 36%.

So on $6,000 a month gross, that caps housing at $1,680 and all debts combined at $2,160 (Rocket Mortgage). Your other debts eat directly into what's left for a mortgage — which is why two buyers with identical incomes often qualify for very different homes.

Why the bank's number isn't your number

Here's the part most buyers miss. Lenders can push debt-to-income (DTI) ratios well above the 28/36 guideline — FHA loans, for example, use standard benchmarks of 31% for housing and 43% for total debt, and can stretch higher with strong compensating factors like a good credit score or cash reserves. That approval is a ceiling, not a target.

A $480,000 approval that leaves your emergency fund drained isn't affordable. One client I worked with was approved for a higher-priced home but chose to buy below it to keep savings intact — a reminder that the rule is a starting point for your own budget, not just a lender's box (New American Funding).

The hidden costs that change the math

The payment you budget for is never just principal and interest. The 28% figure should include property taxes, homeowners insurance, and mortgage insurance, plus HOA dues when they apply. Omit those and your real monthly cost can land far above the number you planned for.

On top of the payment, set aside for closing costs, a down payment, and ongoing maintenance — repairs, utilities, and routine upkeep that never show up on a lender's worksheet. The clearest affordability test is honest: if a payment fits within 28% of your income AND leaves room for the rest of your life, it's your number.

What to do next

Run your own 28/36 numbers before you shop. Total your debts, estimate your full housing payment, and be honest about the lifestyle you want to keep. If the math feels tight, a strong credit score and a larger down payment can open up even more breathing room — and an experienced broker can show you which loan programs fit your actual situation.