Most lenders apply the 28/36 rule: housing costs stay under 28% of gross monthly income, and total debt under 36%. On a $100,000 salary at the current Freddie Mac 30-year rate of 6.58%, that works out to roughly a $375,000 home with 20% down and no other debt — before your own debts, taxes, and insurance adjust it.
A worked example: what a $100,000 salary buys
A $100,000 salary is about $8,333 in gross monthly income. The 28% front-end limit caps housing at roughly $2,333 a month. Set aside an estimated $420 for property taxes and homeowners insurance, and about $1,913 is left for principal and interest.
The calculator above runs this precisely for your income, debts, rate, and down payment. Prefer to work backward from a monthly payment? Use the mortgage payment calculator, and check your ratio directly with the DTI calculator.
The 28/36 rule — and when lenders bend it
The 28/36 rule is a guideline, not a hard cutoff. The Consumer Financial Protection Bureau notes that lenders often approve higher ratios — many conventional loans allow a back-end DTI up to 43%, and some programs stretch to 50% with strong compensating factors such as cash reserves or a high credit score.
- ·Front-end (28%) — housing costs alone (PITI) as a share of gross income.
- ·Back-end (36%) — all monthly debt, including the new mortgage, as a share of gross income.
- ·Qualifying is not the same as comfortable — the maximum a lender approves may leave little room for savings, repairs, or a rate that resets.
What lowers the number you qualify for
Existing monthly debt
Every $200 of monthly debt payment is roughly $200 less you can put toward a mortgage under the back-end limit — which at 6.58% is about $31,000 less home. Paying down a car loan or credit card before applying can raise your ceiling more than a small raise would.
Interest rate
A higher rate shrinks the loan a given payment supports. The same $1,913 monthly that buys a $300,000 loan at 6.58% supports only about $286,000 at 7.58% — roughly $14,000 less home for the same budget.
Taxes and insurance
Because taxes and insurance count inside the 28% housing figure, high-tax counties and high-premium states leave less room for principal and interest. Our property tax calculator and state cost guides show how much this varies by location.
Max vs. comfortable
The calculator shows two numbers: the maximum a lender's ratios allow, and a more conservative target. Buying below your maximum leaves a cushion for the costs that do not show up in a DTI calculation — maintenance (budget roughly 1% of the home's value a year), closing costs of 2%–5% of the price, and the emergencies that make a tight payment stressful. New to the process? Start with the First-Time Home Buyer Guide.
Methodology
Affordability figures apply the standard 28/36 debt-to-income guideline to gross monthly income, using the Freddie Mac PMMS 30-year average posted the week of July 23, 2026 (6.58%) and the standard amortization formula. The worked example reserves an estimated share of the 28% housing budget for property taxes and homeowners insurance; your actual figures depend on location, credit, debts, and lender. DTI limits and exceptions reflect CFPB guidance and common conventional-loan underwriting.
Sources
- Freddie Mac — Primary Mortgage Market Survey (rates, week of July 23, 2026) — accessed 2026-07-26
- CFPB — How much house can I afford? (DTI guidance) — accessed 2026-07-26
- CFPB — Prepare to buy a home — accessed 2026-07-26