On a $100,000 salary, the classic 28/36 rule caps your total housing payment at about $2,333 a month. With 20% down, a 6.5% 30-year fixed rate, property tax of 1.1% of the home’s value and $150 a month for insurance, that supports a home price of about $365,500, a loan of about $292,400. Change the rate, your other debts, the down payment or local taxes and the number moves by tens of thousands of dollars, so treat it as a starting point rather than an answer.
The 28/36 rule
Lenders and many planners use two debt-to-income (DTI) limits based on gross monthly income:
- Front-end ratio (28%): housing costs, meaning principal, interest, property tax, homeowners insurance, mortgage insurance and HOA dues, should not exceed 28% of gross income.
- Back-end ratio (36%): housing plus all other monthly debt payments (car loans, student loans, credit card minimums, child support) should not exceed 36%.
For $100,000: gross monthly income is $8,333.33. The front-end limit is $2,333.33 and the back-end limit is $3,000.00 minus your other debts. If those debts are under $666.67 a month, the 28% limit is the binding one. The guide on how to calculate debt-to-income ratio covers which debts count.
Turning the payment into a home price
The housing payment has several parts that each scale with the price. With a 20% down payment, the loan is 80% of the price, and:
where f is the monthly payment per dollar borrowed: i ÷ (1 − (1 + i)−360) with i = rate ÷ 12. At 6.5%, f = 0.0063207. Solving for the price:
- Budget after insurance: $2,333.33 − $150 = $2,183.33
- Cost per dollar of price: 0.8 × 0.0063207 + 0.011 ÷ 12 = 0.0059732
- Price: $2,183.33 ÷ 0.0059732 ≈ $365,500
Check it: the loan is $292,417, principal and interest are $1,848.27, property tax is $335.06 and insurance is $150.00, for $2,333.33. The how much house can I afford calculator runs this solve with your own numbers.
Affordable price by salary
Same assumptions (6.5%, 30 years, 20% down, 1.1% property tax, $150 insurance, no other debts above the back-end limit):
| Gross salary | Max housing payment (28%) | Approx. home price | Loan amount |
|---|---|---|---|
| $50,000 | $1,166.67 | $170,200 | $136,200 |
| $75,000 | $1,750.00 | $267,900 | $214,300 |
| $100,000 | $2,333.33 | $365,500 | $292,400 |
| $125,000 | $2,916.67 | $463,200 | $370,500 |
| $150,000 | $3,500.00 | $560,800 | $448,700 |
| $200,000 | $4,666.67 | $756,200 | $604,900 |
A rough rule of thumb follows from the table: at today’s rates and these assumptions, the 28% rule supports a price of about 3.4 to 3.8 times gross income.
What changes the answer
Interest rates
Holding the $2,333 budget fixed on a $100,000 salary:
| 30-year rate | Approx. home price | Principal and interest |
|---|---|---|
| 5.5% | $400,000 | $1,816.71 |
| 6.0% | $382,200 | $1,833.02 |
| 6.5% | $365,500 | $1,848.27 |
| 7.0% | $349,900 | $1,862.55 |
| 7.5% | $335,400 | $1,875.92 |
Each half-point of rate moves the price by roughly $14,500 to $18,000. The mortgage calculator shows the payment for any price and rate.
Other monthly debts
The back-end limit kicks in once other debts exceed $666.67. With an $800 car and student loan payment, the back-end limit is $3,000 − $800 = $2,200, and the affordable price drops to about $343,200. Paying off a car loan before applying can raise your budget more than a raise would.
Down payment and mortgage insurance
A smaller down payment means a bigger loan and, on a conventional loan, private mortgage insurance (PMI) until you reach 20% equity. Assuming PMI of 0.5% of the loan a year at 10% down, the price falls to about $312,800; at 5% down with 0.7% PMI, about $292,100. The cash needed also differs: 20% of $365,500 is about $73,100, before closing costs that commonly run 2% to 5% of the loan amount. The down payment calculator and closing costs calculator help plan the cash side.
Property taxes, insurance and HOA dues
Property tax rates range from well under 1% to more than 2% of value depending on the state and county, and insurance costs have risen sharply in some coastal and wildfire-prone areas. An HOA fee of $300 a month comes straight out of the $2,333, cutting the affordable price by roughly $50,000 at 6.5%.
What lenders actually allow
The 28/36 rule is conservative. Fannie Mae’s guidelines allow total DTI up to 45% for manually underwritten loans with compensating factors and up to 50% through its automated underwriting system. FHA’s standard limits are 31% front-end and 43% back-end, with exceptions. A lender may therefore approve you for $450,000 or more on $100,000 of income. The CFPB’s consumer guidance suggests homeowners aim for total debt of 36% or less of gross income, and that is a better guide to a payment you can live with.
A budget check with take-home pay
Gross-income rules ignore taxes and savings. A single filer earning $100,000 who saves 6% in a 401(k) might take home roughly $6,000 a month. A $2,333 housing payment would be about 39% of that, leaving around $3,700 for everything else, including maintenance. A common planning figure is to budget 1% to 2% of the home’s value each year for repairs, or $3,650 to $7,300 on a $365,500 home. If that feels tight, aim lower, or compare costs with the rent vs. buy calculator.
Steps to find your own number
- Divide your gross annual income by 12, and multiply by 0.28 and 0.36.
- Subtract your other monthly debt payments from the 36% figure; use the smaller result.
- Get local estimates for property tax, insurance and HOA dues.
- Decide on a down payment and whether PMI applies.
- Solve for the price at a current rate quote, then check the payment against your take-home pay.
For loan-term choices once you know your budget, see 15-year vs. 30-year mortgage.
These figures are estimates for education, not financial advice or a loan offer. Lender approval depends on credit, assets, loan program and full underwriting; get a Loan Estimate from several lenders before deciding.
Frequently asked questions
How much house can I afford on $100K with no down payment?
With a zero-down VA or USDA loan, the same $2,333 monthly housing budget at 6.5% supports roughly $295,000 to $300,000 once you add property tax, insurance and any guarantee fee. Without a large down payment, more of the budget goes to principal and interest on a bigger loan.
Is the 28/36 rule still used by lenders?
It is a common starting point, not a hard limit. Conventional loans underwritten through Fannie Mae's automated system can allow total debt-to-income ratios up to 50%, and FHA's standard ratios are 31% and 43%. Qualifying for more does not mean the payment is comfortable.
Should I use gross or take-home pay for affordability?
Lenders use gross monthly income. For your own budget, also check the payment against take-home pay: on $100,000 gross, a $2,333 housing payment is roughly 35% to 40% of net pay, depending on taxes and retirement savings.
How much does a 1% change in mortgage rates affect what I can afford?
With the same $2,333 monthly budget, moving from 6.5% to 7.5% lowers the affordable price from about $365,500 to about $335,400 with 20% down, a drop of roughly $30,000.
Does the 28% include property taxes and insurance?
Yes. The 28% front-end ratio covers the whole housing payment: principal, interest, property tax, homeowners insurance, mortgage insurance and HOA dues. Leaving out taxes and insurance overstates what you can afford.