How Much House Can I Afford in 2026?
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There's a big difference between what a bank will lend you and what you can comfortably afford. Lenders approve people for mortgages that eat up 43% or more of their gross income. That math works on paper. It doesn't work on a Tuesday night when the car needs new brakes and daycare is due Friday.
Here's how to figure out what you can actually afford — with real numbers, not vibes.
Start with your take-home pay
Forget gross income. You don't spend gross income. You spend what hits your bank account after taxes, health insurance, and retirement contributions.
If your household brings home $6,000 per month after all deductions, that's your real starting number.
The 28/36 rule (and why it's just a starting point)
The most common guideline says:
- Spend no more than 28% of gross income on housing costs (mortgage, taxes, insurance)
- Keep total debt payments under 36% of gross income
On a $90,000 gross salary, that's roughly $2,100/month for housing. But this rule was created decades ago when healthcare, childcare, and student loans looked very different. It's a useful ceiling, not a target.
A more conservative approach: keep your mortgage payment under 25% of your take-home pay. On $6,000/month take-home, that's $1,500 for your total payment including taxes and insurance.
What's actually included in your monthly payment
Your mortgage payment isn't just principal and interest. Here's the full picture:
Principal + Interest — the loan itself. On a $300,000 loan at 6.5% for 30 years, this is about $1,896/month.
Property taxes — varies wildly by location. National median is roughly 1.1% of home value per year. On a $350,000 home, that's about $320/month.
Homeowner's insurance — typically $150-250/month depending on location and coverage.
PMI (Private Mortgage Insurance) — if you put down less than 20%, expect to add $100-300/month. This goes away once you hit 20% equity.
HOA fees — if applicable, $200-600/month for condos, sometimes more.
Add those up and a $350,000 house with 10% down might cost you $2,400-2,700/month all-in — significantly more than the $1,896 principal and interest figure that headlines love to quote.
The numbers at different price points
Here's what different home prices actually cost monthly, assuming 10% down, 6.5% rate, 30-year fixed, with taxes and insurance:
| Home Price | Down Payment | Monthly Payment (all-in) | Income Needed (25% rule) |
|---|---|---|---|
| $250,000 | $25,000 | $1,850-2,100 | $7,400-8,400/mo take-home |
| $300,000 | $30,000 | $2,150-2,450 | $8,600-9,800/mo take-home |
| $350,000 | $35,000 | $2,450-2,800 | $9,800-11,200/mo take-home |
| $400,000 | $40,000 | $2,750-3,100 | $11,000-12,400/mo take-home |
| $450,000 | $45,000 | $3,050-3,400 | $12,200-13,600/mo take-home |
These ranges account for variation in property taxes and insurance by state. Texas and New Jersey will be toward the high end. Colorado and Oregon toward the lower end.
The costs nobody mentions
Budget an extra 1-3% of the home's value per year for maintenance. That's $3,500-10,500/year on a $350,000 home. Roofs fail, furnaces die, and plumbing has opinions.
Closing costs run 2-5% of the purchase price. On a $350,000 house, that's $7,000-17,500 on top of your down payment.
Moving costs, new furniture, and the inevitable Home Depot trips in the first year add up fast. Budget at least $5,000-10,000 for the transition.
How mortgage rates change the equation
Rates make an enormous difference. On a $300,000 loan over 30 years:
| Rate | Monthly P&I | Total Interest Paid |
|---|---|---|
| 5.5% | $1,703 | $313,000 |
| 6.0% | $1,799 | $347,500 |
| 6.5% | $1,896 | $382,600 |
| 7.0% | $1,996 | $418,500 |
| 7.5% | $2,098 | $455,200 |
A single percentage point on a $300,000 loan changes your monthly payment by roughly $200 and your total interest by $70,000+. This is why rate shopping across multiple lenders — not just your bank — matters so much.
Run your own numbers
The tables above give you a ballpark. But your situation has specific numbers — your actual income, your debts, your target down payment, your local tax rates.
Use the mortgage calculator to plug in your exact scenario and see what a home actually costs you monthly, including the full amortization schedule showing how your equity builds over time.
The bottom line
If the monthly all-in payment feels tight at 25% of your take-home pay, the house is too expensive. No amount of "but it's an investment" changes the math on a payment that stresses you out every month.
Buy less house than you can afford. You'll sleep better, save more, and actually enjoy living there.
Ready to run your own numbers?
Open the mortgage calculator