How Much House Can I Afford?
7 min read
A practical framework for matching home price to income, debt and lifestyle — without house-poor regret.
Buying a home is the largest financial decision most people make. Before you fall in love with a listing, the right starting point is your monthly cash flow — not the sticker price.
The classic guideline is the 28/36 rule: housing costs should stay under 28% of gross monthly income, and total debt under 36%. Run those numbers first; they tell you the price range that won't strain your life.
Don't forget the hidden costs: property taxes, insurance, HOA fees, and a maintenance reserve of about 1% of home value per year. A mortgage calculator that ignores these will overstate what you can comfortably afford.
Finally, stress-test your budget against a higher rate or a temporary income drop. If the payment still works, you've found a home you can truly afford.
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Written and reviewed by
Keiron Brown, Psy.D.
Founder & Lead Educator, CalculatingWealth
Keiron Brown, Psy.D., is a clinical psychologist and the founder of Relationale LLC, which publishes CalculatingWealth. His doctorate is in psychology, not finance: he is not a registered investment adviser, accountant, or attorney, and nothing here is financial, investment, tax, or legal advice. His work here focuses on financial education, critical thinking, and decision-making — helping people understand the math behind money so they can plan with clarity and confidence. He writes about wealth building, retirement planning, investing literacy, budgeting, and the behavioral patterns that shape long-term financial outcomes.
Editorial standards: All educational content on CalculatingWealth is reviewed for accuracy, sourced from primary references where applicable (IRS, SSA, Federal Reserve, BLS), and updated when rules or rates change. Content is for educational and informational purposes only and does not constitute financial, investment, tax, or legal advice.
Not advice: Keiron Brown is not a registered investment adviser, broker-dealer, certified public accountant, enrolled agent, attorney, or licensed insurance producer. His work is educational in nature. See our full disclaimer.