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How Much House Can I Afford?
Your maximum home price by the 28/36 rule, and the full monthly payment — principal, interest, taxes, insurance and PMI.
Your finances
Home price you can afford
$300,380
by the 28/36 rule, with your down payment
Estimate · rule of thumb
- Monthly housing budget
- $2,333
- Loan amount
- $260,380
- Principal & interest
- $1,802.82
- Property tax
- $250.32
- Insurance
- $150.00
- PMI
- $130.19
- HOA
- $0.00
- Total monthly payment
- $2,333.33
- Interest over the loan
- $388,635
How this was calculated
Budget = the lower of 28% of gross monthly income and 36% minus your other debt payments. We then find the price whose full payment — principal and interest (P&I = loan × r(1+r)ⁿ ÷ ((1+r)ⁿ − 1), r = rate ÷ 12), property tax, insurance, HOA and PMI if you put down less than 20% — equals that budget. Lenders may allow more (Fannie Mae up to 45–50% total debt), but more isn't the same as comfortable. Closing costs (often 2–5%) are not included.
Calculation housing.mortgage-affordability v1.0.0.
Quick answer: what you can afford at today's rates
A common rule of thumb, the 28/36 rule, keeps your total housing payment at or below 28% of gross monthly income and all debt payments, housing included, at or below 36%. At Freddie Mac's 30-year average of 7.40% (week of October 8, 2026), a household earning $100,000 with $40,000 down and no other debts could afford a home of about $303,186. That keeps the full payment — principal, interest, property tax, insurance and mortgage insurance — at $2,333 a month.
Treat that as a ceiling rather than a target. The calculator above lets you change the rate, term, down payment, taxes, insurance, HOA dues and the 28/36 limits to match your situation.
Mortgage rates right now and what they cost
Freddie Mac's Primary Mortgage Market Survey for the week of October 8, 2026 averaged 7.40% for a 30-year fixed and 6.73% for a 15-year fixed, up from 6.30% and 5.53% a year earlier (Freddie Mac PMMS; FRED). The 15-year average climbed from 6.04% on September 3 to 6.73% five weeks later. Rates are a snapshot: the survey updates every Thursday, and the rate you're offered depends on your credit, down payment and loan type.
| Interest rate | 30-year payment | 30-year total interest | 15-year payment | 15-year total interest |
|---|---|---|---|---|
| 5.53% (15-yr, a year ago) | $1,993.85 | $367,786 | $2,865.37 | $165,767 |
| 6.00% | $2,098.43 | $405,435 | $2,953.50 | $181,630 |
| 6.30% (30-yr, a year ago) | $2,166.40 | $429,904 | $3,010.53 | $191,895 |
| 6.50% | $2,212.24 | $446,406 | $3,048.88 | $198,798 |
| 6.73% (15-yr average now) | $2,265.44 | $465,558 | $3,093.30 | $206,794 |
| 7.00% | $2,328.56 | $488,282 | $3,145.90 | $216,262 |
| 7.40% (30-yr average now) | $2,423.33 | $522,399 | $3,224.69 | $230,444 |
| 8.00% | $2,568.18 | $574,545 | $3,344.78 | $252,060 |
At today's 30-year average, a $350,000 loan costs $2,423.33 a month in principal and interest — $256.93 more than at last year's 6.30%. Over 30 years you'd pay $522,399 in interest. A 15-year loan at 6.73% costs $3,093.30 a month, $669.97 more, but total interest drops to $206,794 — a saving of $315,605.
The mortgage payment formula
Loan × r(1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where r = annual rate ÷ 12 and n = number of monthly payments = monthly payment
Example: $350,000 at 7.40% for 360 months = $2,423.33 a month.
Your monthly payment, line by line
Lenders look at PITI: principal, interest, property taxes and insurance — plus mortgage insurance and HOA dues where they apply. Here is the full payment for the $303,186 home in the quick answer: a $263,186 loan (13.2% down) at 7.40% for 30 years.
| Part of the payment | Per month |
|---|---|
| Principal and interest | $1,822.25 |
| Property tax (1% of price a year) | $252.66 |
| Homeowners insurance ($1,522 a year) | $126.83 |
| Private mortgage insurance (0.6% of the loan a year) | $131.59 |
| Total monthly housing payment | $2,333.33 |
- Property tax varies widely. The Tax Foundation's effective rates on owner-occupied homes (2022 data) run from 0.26% in Hawaii and 0.36% in Alabama to 1.95% in Illinois and 2.08% in New Jersey; the average U.S. bill was $1,815 (Tax Foundation). The calculator defaults to 1% — enter your local rate.
- Homeowners insurance averaged $1,522 a year in 2023 on conventional 30-year loans, about $4.90 per $1,000 of home value, up 40.8% from 2018 (Freddie Mac). Premiums have risen since, so get a quote.
- Mortgage insurance applies when you put down less than 20% on a conventional loan; the calculator's default is 0.6% of the loan a year. See PMI and FHA insurance.
For comparison, the Census Bureau's 2024 median monthly owner cost for homes with a mortgage was $2,035, from $1,272 in West Virginia to $3,181 in D.C. (ACS 2024).
Home price you can afford by income
These rows come from the calculator: 30-year fixed at 7.40%, 1% property tax, $1,522 a year insurance, 0.6% PMI when the down payment is under 20%, and the 28/36 rule.
| Annual income | Max housing payment (28%) | $25,000 down, no other debts | $25,000 down, $1,000/mo debts | $60,000 down, no other debts |
|---|---|---|---|---|
| $60,000 | $1,400 | $176,666 | $109,094 | $217,682 |
| $80,000 | $1,867 | $233,183 | $176,666 | $277,842 |
| $100,000 | $2,333 | $289,700 | $249,331 | $321,168 |
| $125,000 | $2,917 | $360,346 | $340,161 | $391,814 |
| $150,000 | $3,500 | $430,992 | $430,992 | $462,460 |
| $200,000 | $4,667 | $572,284 | $572,284 | $603,752 |
Other debts matter because of the 36% back-end limit. The gap between 36% and 28% is 8% of gross pay — $667 a month at $100,000. Debt payments below that don't lower your budget; above it, every dollar does. With $1,000 a month of car or student loan payments, the housing budget at $100,000 falls from $2,333 to $2,000 (36% of gross minus debts), and the price range drops from $289,700 to $249,331. At $150,000 and above, the same $1,000 fits inside the 8% gap and changes nothing. Paying down debts first can raise your price range — the debt payoff calculator shows how quickly.
How lenders decide: debt-to-income ratios
Your debt-to-income ratio (DTI) is "all your monthly debt payments divided by your gross monthly income," and the limit varies by loan and lender (CFPB). The 28/36 rule is an industry rule of thumb (Bankrate), not a lending requirement — lenders can approve more:
| Standard | Maximum total DTI | Source |
|---|---|---|
| 28/36 rule of thumb | 36% (housing alone 28%) | Industry convention |
| Fannie Mae, manually underwritten | 36%; up to 45% with required credit score and reserves | Selling Guide B3-6-02 |
| Fannie Mae, Desktop Underwriter | 50% | Selling Guide B3-6-02 |
Being approved at 45% or 50% doesn't mean the payment fits your budget (Fannie Mae). Before stretching, check the payment against your take-home pay in the budget calculator, and see how retirement saving changes it with the 401(k) paycheck calculator.
Down payment: 0%, 3%, 3.5% or 20%?
| Loan type | Minimum down | On a median-priced home | Mortgage insurance |
|---|---|---|---|
| Conventional (Fannie Mae 97% LTV options) | 3% | $12,873 | PMI, cancellable at 20% equity |
| FHA, credit score 580+ | 3.5% | $15,019 | Upfront and annual MIP |
| FHA, credit score 500–579 | 10% | $42,910 | Upfront and annual MIP |
| VA (eligible service members and veterans) | 0% | $0 | None; a funding fee may apply |
| USDA (eligible rural buyers) | 0% | $0 | Check USDA program terms |
| Conventional, no PMI | 20% | $85,820 | None |
The standard Fannie Mae 97% option requires at least one first-time buyer; HomeReady doesn't (Fannie Mae). VA loans need no down payment as long as the price isn't above the appraised value (VA), and USDA offers "100% loans to eligible rural homebuyers" (USDA). FHA's 3.5% minimum requires a 580+ credit score; scores of 500–579 need 10% down (HUD Handbook 4000.1). To plan how long a down payment will take, try the compound interest calculator.
PMI and FHA mortgage insurance
Conventional PMI: Freddie Mac estimates PMI at roughly $30 to $70 a month for every $100,000 borrowed. On a $315,000 loan that's about $95 to $221 a month. You can ask to cancel PMI once you reach 20% equity, and it ends automatically when your balance is scheduled to reach 78% of the home's original value (Freddie Mac).
FHA mortgage insurance (MIP) works differently. Under Mortgagee Letter 2023-05 there's an upfront premium of 1.75% of the base loan, plus an annual premium. For loans longer than 15 years up to $726,200, the annual rate is 0.55% with less than 5% down and 0.50% with 5% or more; larger loans pay 0.75% or 0.70%. With less than 10% down, annual MIP lasts for the life of the loan; with 10% or more, it lasts 11 years (HUD).
Base loan $337,750 × 1.75% upfront; × 0.55% ÷ 12 monthly = $5,910.63 upfront + $154.80 a month
With 3.5% down, the annual premium stays for the life of the loan at this down payment.
2026 loan limits
| Loan type | Standard limit | High-cost area ceiling |
|---|---|---|
| Conforming (Fannie Mae / Freddie Mac) | $832,750 | $1,249,125 |
| FHA forward mortgage | $541,287 (floor) | $1,249,125 |
Sources: FHFA; HUD. FHA limits apply to case numbers assigned on or after January 1, 2026, and vary by county between the floor and ceiling.
Closing costs and cash to close
Freddie Mac puts closing costs at about 2% to 5% of the purchase price, with earnest money of 1% to 2% and a home inspection around $300 to $500 (Freddie Mac). On the August 2026 median existing-home price of $429,100, closing costs would be about $8,582 to $21,455, and earnest money $4,291 to $8,582.
Your lender must send a Loan Estimate within three business days of your application (CFPB). Its estimated closing costs section lists origination charges, services you can and can't shop for, prepaid taxes and insurance, lender credits and points — compare these line by line across lenders. After closing, keep an emergency fund for repairs; homes need them.
Home prices and other costs now
The National Association of Realtors' median existing-home price was $429,100 in August 2026, up 1.6% from a year earlier (NAR). The Census Bureau's median new-home price was $393,700 in August 2026 (Census Bureau) — new homes are currently cheaper at the median than existing ones. These monthly figures move, so check your local market.
Still deciding whether to buy? Compare the full monthly payment with what you'd pay to rent using the rent affordability calculator. Owning adds maintenance and repairs, but can build equity if prices hold and you stay long enough.
Tax notes for 2026
- Mortgage interest: interest on up to $750,000 of debt used to buy, build or improve your home ($375,000 married filing separately) is deductible if you itemize. The One Big Beautiful Bill Act (P.L. 119-21) removed the end date, so that cap is now permanent (26 U.S.C. § 163(h)).
- Mortgage insurance: the same law makes mortgage insurance premiums — PMI and FHA, VA or USDA premiums — deductible as mortgage interest again for tax years beginning after December 31, 2025. The deduction shrinks by 10% for each $1,000 (or part) of adjusted gross income over $100,000 (each $500 over $50,000 if married filing separately), and it applies to mortgage insurance contracts issued after 2006. Updated IRS guidance wasn't available when we checked, so confirm with the 2026 version of IRS Publication 936.
- Both deductions help only if your itemized deductions exceed the standard deduction.
Common questions
What are mortgage rates right now?
Freddie Mac's survey for the week of October 8, 2026 averaged 7.40% for a 30-year fixed and 6.73% for a 15-year fixed, up from 6.30% and 5.53% a year earlier. Rates update weekly.
What is the 28/36 rule?
A rule of thumb that keeps housing costs at or below 28% of gross monthly income and all debt payments at or below 36%. Lenders can go higher: Fannie Mae allows up to 45% manually underwritten and 50% through Desktop Underwriter.
How much is the payment on a $350,000 mortgage?
$2,423.33 a month in principal and interest on a 30-year loan at 7.40%, or $3,093.30 on a 15-year loan at 6.73%. Property tax, insurance and any mortgage insurance come on top.
What is the conforming loan limit for 2026?
$832,750 for a one-unit home in most of the U.S., and up to $1,249,125 in high-cost areas.
How much does PMI cost and when does it end?
Freddie Mac estimates about $30–$70 a month per $100,000 borrowed. You can ask to cancel at 20% equity, and it ends automatically when your balance is scheduled to reach 78% of the original value.
How much are closing costs?
Usually about 2% to 5% of the purchase price. Your lender must send a Loan Estimate itemizing them within three business days of your application.
Sources
- Primary Mortgage Market Survey — Freddie Mac. Accessed October 13, 2026. Rates change weekly.
- 30-year fixed rate mortgage average (MORTGAGE30US) — Federal Reserve Bank of St. Louis (FRED). Accessed October 13, 2026.
- What is a debt-to-income ratio? — Consumer Financial Protection Bureau. Accessed October 13, 2026.
- Selling Guide B3-6-02: debt-to-income ratios — Fannie Mae. Accessed October 13, 2026.
- How much house can I afford? — Bankrate. Accessed October 13, 2026.
- FHFA announces conforming loan limit values for 2026 — Federal Housing Finance Agency. Accessed October 13, 2026.
- HUD No. 25-145: 2026 FHA loan limits — U.S. Department of Housing and Urban Development. Accessed October 13, 2026.
- Mortgagee Letter 2023-05: FHA annual mortgage insurance premium reduction — U.S. Department of Housing and Urban Development. Accessed October 13, 2026.
- 97% loan-to-value options — Fannie Mae. Accessed October 13, 2026.
- VA-backed purchase loan — U.S. Department of Veterans Affairs. Accessed October 13, 2026.
- Single Family Housing Guaranteed Loan Program — U.S. Department of Agriculture Rural Development. Accessed October 13, 2026.
- Breaking down PMI — Freddie Mac. Accessed October 13, 2026.
- Budgeting for upfront homebuying costs — Freddie Mac. Accessed October 13, 2026.
- What is a Loan Estimate? — Consumer Financial Protection Bureau. Accessed October 13, 2026.
- NAR existing-home sales report shows 2.0% decrease in August — National Association of Realtors. Accessed October 13, 2026.
- New residential sales — U.S. Census Bureau. Accessed October 13, 2026.
- Property taxes by state and county, 2024 — Tax Foundation. Accessed October 13, 2026. Calendar-year 2022 data.
- Maryland ranks: American Community Survey 2024 1-year estimates — Maryland Department of Planning. Accessed October 13, 2026. State ranking tables compiled from Census Bureau ACS 2024 1-year data.
- Homeowners insurance costs are rising — Freddie Mac. Accessed October 13, 2026. 2023 data; premiums have risen since.
- 26 U.S. Code § 163 (interest) — Legal Information Institute, Cornell Law School. Accessed October 13, 2026.