Most lenders apply the 28/36 rule: housing costs stay under 28% of gross monthly income, and total debt under 36% — on the FULL payment (principal, interest, taxes, insurance, and PMI above 80% loan-to-value), not principal and interest alone. On a $100,000 salary with this calculator's own defaults — Texas taxes and insurance, $500/month in other debts, $60,000 down, and its 6.75% placeholder rate — that works out to a $293,096 home. The current Freddie Mac 30-year average is 7.03% (week of September 24, 2026) — above the calculator's 6.75% placeholder, so at the same defaults it supports about $287,757, not $293,096.
A worked example: what a $100,000 salary buys
A $100,000 salary is about $8,333 in gross monthly income. The 28% front-end limit caps the FULL housing payment — principal, interest, property tax, insurance, and PMI above 80% loan-to-value — at $2,333 a month, not principal and interest alone. The calculator solves for the price whose full payment hits that ceiling exactly.
The calculator above runs this precisely for your income, debts, rate, and down payment. Prefer to work backward from a monthly payment? Use the mortgage payment calculator, and check your ratio directly with the DTI calculator.
The 28/36 rule — and when lenders bend it
The 28/36 rule is a guideline, not a hard cutoff. The Consumer Financial Protection Bureau notes that lenders often approve higher ratios — many conventional loans allow a back-end DTI up to 43%, and some programs stretch to 50% with strong compensating factors such as cash reserves or a high credit score.
- ·Front-end (28%) — housing costs alone (PITI) as a share of gross income.
- ·Back-end (36%) — all monthly debt, including the new mortgage, as a share of gross income.
- ·Qualifying is not the same as comfortable — the maximum a lender approves may leave little room for savings, repairs, or a rate that resets.
What lowers the number you qualify for
Existing monthly debt
The first $167/month of debt above the calculator's $500 default does not move the price at all here, because the 28% front-end limit binds before the 36% back-end limit does. Past that point — above about $667/month in debt at this $100,000 income — every added $200 of monthly debt is roughly $25,044 less home at the calculator's 6.75% default rate and Texas's 1.8% property-tax rate (debt $900 to $1,100 moves the price $263,878 to $238,834). Paying down a car loan or credit card before applying can raise your ceiling more than a small raise would.
Interest rate
A higher rate shrinks the price a given budget supports. The same $2,333 monthly budget that buys a $293,096 home at the calculator's 6.75% default rate supports only about $274,852 at 7.75% — roughly $18,244 less home for the same budget.
Taxes and insurance
Because taxes and insurance count inside the 28% housing figure, high-tax counties and high-premium states leave less room for principal and interest. Our property tax calculator and state cost guides show how much this varies by location.
Max vs. comfortable
The calculator shows two numbers: the maximum a lender's ratios allow, and a more conservative target. Buying below your maximum leaves a cushion for the costs that do not show up in a DTI calculation — maintenance (budget roughly 1% of the home's value a year), closing costs of 2%–5% of the price, and the emergencies that make a tight payment stressful. New to the process? Start with the First-Time Home Buyer Guide.
Methodology
Affordability figures apply the standard 28/36 debt-to-income guideline to gross monthly income, solving for the highest home price whose full monthly payment — principal, interest, property tax, homeowners insurance, and PMI above 80% loan-to-value — fits that budget, using the standard amortization formula. The worked example uses the calculator's own defaults: Texas's Tax Foundation property-tax rate (2024 state data) and Insurance.com insurance premium, and its 6.75% placeholder interest rate, which is not itself a rate quote (the current Freddie Mac PMMS 30-year average is 7.03%, week of September 24, 2026, cited below). Your actual figures depend on location, credit, debts, and lender. DTI limits and exceptions reflect CFPB guidance and common conventional-loan underwriting.
Sources
- Freddie Mac — Primary Mortgage Market Survey (rates, week of September 24, 2026) — accessed 2026-09-28
- Tax Foundation — Property Taxes by State and County (state data 2024) — accessed 2026-09-28
- Insurance.com — Average homeowners insurance rates by state (Rate Analysis 2026) — accessed 2026-09-28
- CFPB — How much house can I afford? (DTI guidance) — accessed 2026-07-26
- CFPB — Prepare to buy a home — accessed 2026-07-26