How Much House Can You Really Afford?

If you're thinking about buying a home, one of the first (and most important) questions to ask is:“How much house can I really afford?”

It’s easy to get excited by beautiful homes online or pre-approval numbers from the bank—but affordability isn’t just about what a lender says. It’s about what you feel comfortable paying, month after month.

Here’s how to figure out what you can realistically afford without overextending your finances.

1. Start With the 28/36 Rule

Most lenders use a guideline called the 28/36 Rule to determine your borrowing limit.

• You should spend no more than 28% of your gross monthly income on housing expenses (mortgage, taxes, insurance).

• You should spend no more than 36% on total debt, including credit cards, car loans, and student loans.

Example:If your gross monthly income is $6,000:

• Housing expenses: max $1,680/month

• Total debt: max $2,160/month

2. Factor in All Monthly Housing Costs

It’s not just the mortgage. Include:

• Property taxes

• Homeowners insurance

• HOA fees (if applicable)

• Private Mortgage Insurance (PMI) if your down payment is under 20%

• Utilities (electric, water, internet, etc.)

• Maintenance and repairs

A house within budget on paper could stretch your finances if you don’t include the extras.

3. Consider Your Down Payment

The more you put down, the lower your monthly payment—and the less interest you pay overall.

Typical down payments:

• 3%–5% for first-time buyer programs

• 20% to avoid PMI (Private Mortgage Insurance)

• 0% for VA or USDA loans (for qualified buyers)

Aim for at least 5%–10% if you want manageable payments and better loan terms.

4. Think Beyond the Pre-Approval

Just because you’re pre-approved for $500,000 doesn’t mean you should buy a $500,000 home.

Ask yourself:

• Would I still be comfortable if an emergency came up?

• Am I leaving room in my budget for savings, travel, or kids’ expenses?

• What happens if interest rates rise or my job situation changes?

It’s better to own a home you can live in comfortably than one that stretches you thin.

5. Use a Mortgage Calculator

Try a few different price points and loan scenarios with a mortgage calculator. Play around with:

• Different down payment amounts

• Interest rate changes

• Property tax estimates in your area

This gives you a clearer idea of what your monthly payments would really look like.

6. Account for Lifestyle and Long-Term Goals

If you plan to:

• Start a family

• Change careers

• Pay off other debt

• Travel more

…then leave financial room to live the life you want—not just to own the house you love.

Final Thoughts

When you ask, “How much house can I afford?”—the real answer depends on your full financial picture, not just what the bank says. The right home is one that fits your budget, your goals, and your peace of mind.

Ready to run the numbers and find a home that’s perfect for your lifestyle and budget? Let’s talk—I’d love to help guide you through the process!