The most dangerous number in home buying is the one a lender approves you for. It is calculated to be the most you can technically repay, not the amount that leaves room for retirement, emergencies, and a life outside your mortgage. Being approved for a price and being able to live with it are very different things, and the gap between them is where house-poor buyers get trapped.
Here is how to find your real number.
The 28/36 rule
Lenders size affordability with two ratios. The front-end ratio keeps your total housing payment, principal, interest, taxes, and insurance, at or below about 28 percent of gross monthly income. The back-end ratio keeps all your debt payments combined, housing plus cars, cards, and loans, at or below roughly 36 percent. Because the lower of the two limits applies, paying down other debt can raise your home budget as much as a raise would.
Enter your income and debts above for a comfortable price range and the payment behind it.
Comfortable, not maximum
The 28/36 rule gives a ceiling, not a target. A smarter approach works backward from a monthly payment that still leaves room for the things a mortgage should never crowd out: retirement contributions, an emergency fund, and the real costs of owning. Aim for a payment you would be comfortable making in a lean month, not just a good one, and treat the lender's maximum as the edge of the cliff rather than the destination.
Qualifying for a payment and being able to live with it are not the same thing.
What the ratios leave out
Approval depends on more than income. Lenders also weigh your credit score, your down payment, and your cash reserves, and a payment you technically qualify for ignores the ongoing costs of ownership, maintenance (often near 1 percent of the home's value a year), higher utilities, and furnishing the place. Two people with identical salaries can comfortably afford very different homes depending on their debts, savings, and how much cushion they want. Affordability is personal, not a single formula.
A mortgage payment is not the full cost of a home. Reserve for maintenance, higher utilities, and the surprises every house delivers, so the payment you choose leaves genuine breathing room.
Get your comfortable range above, then buy from a number you chose rather than the one a lender handed you. Our complete guide to mortgages covers what happens next.
Frequently asked questions
How much house can I afford on my salary?
Lenders generally cap housing at about 28 percent of gross monthly income and total debt at 36 percent. Working backward from a payment that leaves room for saving and emergencies is smarter than borrowing the maximum.
What is the 28/36 rule?
A lending guideline: spend no more than about 28 percent of gross monthly income on housing, and no more than 36 percent on all debt payments combined. The lower limit is the one that applies.
How many times my income can I borrow for a home?
It varies with rates, debts, and down payment, but many buyers land near three to five times gross income. The 28/36 rule is a better guide than a simple multiple because it accounts for your other debts and the current rate.
Does being approved mean I should borrow that much?
No. Lenders approve a maximum based on ratios, but a comfortable budget usually sits below it, leaving room for retirement saving, maintenance, and surprises.
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