How Much House Can I Afford? Rules & Calculator
On a $90,000 salary, the standard 28% rule says you can afford about $2,100 a month in total housing costs — roughly a $320,000 home with 20% down and a 30-year mortgage at 6.5%. Lenders use two guardrails: PITI (principal, interest, property tax and insurance) at or below 28% of your gross monthly income, and all monthly debts at or below 36%. This guide explains both rules, works through the $90,000 example step by step, and includes a price table for other incomes.
What is the 28/36 rule?
Lenders don't guess — they use two debt-to-income ratios. The front-end ratio caps your housing costs at 28% of gross monthly income. "Housing costs" means PITI: mortgage principal and interest, property tax, and homeowner's insurance. The back-end ratio caps all your monthly debt payments — housing plus car loans, student loans and credit-card minimums — at 36% of gross income.
On $90,000 a year ($7,500 a month), the math is simple: 28% gives a $2,100 monthly housing budget, and 36% gives a $2,700 ceiling for total debt. The tighter of the two rules always wins. If you already pay $700 a month toward student and car loans, the back-end ratio leaves only $2,000 for housing — less than the $2,100 the front-end ratio allows — so $2,000 becomes your real budget.
How much house can I afford on $90,000 a year?
Let's work it through with realistic assumptions: 20% down, a 30-year fixed mortgage at 6.5%, property tax at 1.5% of the home's value per year, and homeowner's insurance at 0.35% per year. Plug your own numbers into our Mortgage Calculator to see how each input moves the result.
Step 1 — monthly budget. $90,000 ÷ 12 = $7,500 gross per month. × 28% = $2,100 maximum PITI.
Step 2 — cost per $1,000 of house. At 6.5% over 30 years, every $1,000 borrowed costs $6.32 a month in principal and interest. With 20% down you borrow $800 per $1,000 of price, so P&I is 0.8 × $6.32 = $5.06. Tax and insurance add 1.85% a year ÷ 12 ≈ $1.54 per $1,000. Total: about $6.60 per month per $1,000 of home price.
Step 3 — solve for price. $2,100 ÷ $6.60 × $1,000 ≈ $318,000.
Step 4 — sanity check. A $318,000 home means $63,600 down and a $254,400 loan. P&I = 254.4 × $6.32 ≈ $1,608. Tax = $318,000 × 1.5% ÷ 12 ≈ $398. Insurance = $318,000 × 0.35% ÷ 12 ≈ $93. Total: $1,608 + $398 + $93 = $2,099 — right on the $2,100 budget.
What does PITI actually include?
Principal repays the loan balance; interest is the lender's charge — early in a 30-year loan, interest dominates each payment. Property tax varies widely by location (roughly 0.7% to 2.5% of value per year across the US) and is usually collected monthly through escrow. Homeowner's insurance protects against damage and is required by virtually all lenders. First-time buyers often budget for principal and interest only, then get blindsided when tax and insurance add several hundred dollars a month.
How much house can I afford on my salary?
Same assumptions as above (20% down, 6.5%, 30-year fixed, 1.5% tax, 0.35% insurance):
| Annual income | Max PITI / month | Approx. home price | 20% down payment |
|---|---|---|---|
| $60,000 | $1,400 | $212,000 | $42,400 |
| $75,000 | $1,750 | $265,000 | $53,000 |
| $90,000 | $2,100 | $318,000 | $63,600 |
| $100,000 | $2,333 | $354,000 | $70,800 |
| $120,000 | $2,800 | $424,000 | $84,800 |
| $150,000 | $3,500 | $530,000 | $106,000 |
Your market may differ — high-tax states shrink every row, while a lower rate stretches them. Run your exact figures through the Mortgage Calculator before house-hunting.
What about the 3x income rule?
The 3x rule says buy a home worth about three times your gross annual income — $270,000 on a $90,000 salary. It's a quick sanity check, not a budget: it bakes in assumptions about rates, taxes and down payment that may not match your situation. Notice it's more conservative than the 28% rule's $318,000 at 6.5%. When rates are high, the 3x rule is usually the safer of the two; when rates are low, the 28% rule lets you stretch further without overextending.
How does the down payment change the math?
Twenty percent is the magic number because it avoids private mortgage insurance (PMI). Put 10% down on that $318,000 home and you borrow $286,200 — plus PMI at roughly 0.5–1% of the loan per year, about $167 a month at 0.7%, until you reach 20% equity. That PMI alone could fund a nicer kitchen over a few years. Smaller down payments also mean a bigger loan, so you pay more interest twice over. If 20% is out of reach, it's still worth buying — just budget the PMI as part of PITI and plan to drop it once your equity hits 20%.
Try it yourself
Enter your income, down payment and rate to see your own affordable price in seconds.
Practical tips
- Check the back-end ratio first if you carry debt. Car and student loans usually make the 36% rule the binding one — calculate with real minimum payments, not guesses.
- Do the buydown math before paying points. One point (1% of the loan, $2,560 on $256,000) typically cuts the rate ~0.25%, saving about $42 a month here — a 5-year break-even. Only pay points if you'll stay past break-even.
- Budget closing costs separately. Expect 2–5% of the price ($6,400–$15,900 on $318,000) for fees, prepaid tax and insurance — on top of the down payment.
- Test-drive the payment. For 3–6 months, save the gap between your rent and the projected PITI. If it hurts, the house is too expensive; if it's painless, you've started your emergency fund.
- Get pre-approved, not just pre-qualified. Pre-approval means a lender verified your income and credit — sellers treat it almost like cash, and it locks in your real budget.
Frequently asked questions
What is the 28/36 rule for buying a house?
The 28/36 rule caps your housing costs at 28% of gross monthly income and your total debt payments at 36%. On a $90,000 salary ($7,500 a month), that means at most $2,100 a month for PITI — principal, interest, property tax and insurance — and $2,700 a month for all debts combined, including car loans and student loans.
How much house can I afford on $100,000 a year?
At 28% of gross income, a $100,000 salary supports about $2,333 a month in PITI. With 20% down and a 30-year loan at 6.5%, that buys roughly a $354,000 home — about a $283,000 loan. Higher property taxes or a smaller down payment would lower that figure.
Does the 28% rule include property tax and insurance?
Yes. The 28% covers PITI: principal and interest on the mortgage, plus property tax and homeowner's insurance. Many first-time buyers budget only for principal and interest, then get surprised when tax and insurance add several hundred dollars to the monthly bill.
Is the 3x income rule still accurate?
The 3x rule — buy a home worth about three times your gross income — is a quick sanity check, not a precise budget. On $90,000 it suggests $270,000, which is more conservative than the 28% rule's $318,000 at 6.5%. When rates are high, the 3x rule tends to be the safer of the two.
How much do I need for a 20% down payment on a $320,000 house?
You need $64,000 down, leaving a $256,000 loan. Putting down less than 20% usually triggers private mortgage insurance (PMI), which costs roughly 0.5% to 1% of the loan per year — about $107 to $214 a month on a $256,000 loan — until you build 20% equity.
What credit score do I need to buy a house?
Conventional loans generally want a score of 620 or higher, with the best rates reserved for borrowers above 740. FHA loans accept scores as low as 580 with 3.5% down, or 500 with 10% down. A higher score can easily be worth a quarter point or more on your mortgage rate.