How Much House Can I Afford Based on My Salary?
The standard rule says spend no more than 28% of gross monthly income on housing. But you don't pay your mortgage with gross income — you pay it with take-home pay. After taxes, that 28% gross rule often becomes 38–42% of actual take-home, which is too much. The real question is: what percentage of your after-tax income goes to PITI?
The Gross vs. Take-Home Disconnect
Here's why the 28% gross rule misleads people:
| Salary | Monthly Gross | 28% of Gross | Monthly Take-Home (TX) | 28% as % of Take-Home |
|---|---|---|---|---|
| $60,000 | $5,000 | $1,400 | $3,900 | 35.9% |
| $75,000 | $6,250 | $1,750 | $4,733 | 37.0% |
| $100,000 | $8,333 | $2,333 | $6,192 | 37.7% |
| $150,000 | $12,500 | $3,500 | $8,625 | 40.6% |
Single filer, Texas (no state income tax), standard deduction, no pre-tax deductions. Take-home from MyTakeHomeCalc.
A more useful rule: keep PITI (principal, interest, taxes, insurance) at or below 30–33% of your monthly take-home pay. This leaves room for other debt, savings, and living expenses.
What Different Salaries Can Afford (Home Price Estimates)
| Annual Salary | Max Monthly PITI (30% take-home) | Est. Home Price (6.5% rate, 20% down) |
|---|---|---|
| $50,000 | ~$1,003/mo | ~$155,000–$175,000 |
| $60,000 | ~$1,170/mo | ~$180,000–$205,000 |
| $75,000 | ~$1,420/mo | ~$220,000–$250,000 |
| $100,000 | ~$1,858/mo | ~$290,000–$330,000 |
| $125,000 | ~$2,237/mo | ~$350,000–$400,000 |
| $150,000 | ~$2,588/mo | ~$400,000–$460,000 |
| $200,000 | ~$3,292/mo | ~$510,000–$580,000 |
Texas single filer, 6.5% 30-year fixed mortgage rate, 20% down payment, estimated 1.2% property tax + 0.8% insurance. Home prices are estimates — actual affordability depends on local market, down payment, other debts, and credit score.
First, know your real take-home:
Calculate your take-home pay → Then run the full affordability calculation on MorgCalcThe DTI Rule: Your Full Debt Picture
Lenders use Debt-to-Income ratio (DTI) — not just the housing ratio. The standard limits are:
- Front-end ratio (housing only): Maximum 28–31% of gross monthly income for most conventional loans
- Back-end ratio (all debt): Maximum 36–45% of gross monthly income, depending on lender and loan type. FHA loans allow up to 57% in some cases.
If you have $400/month in student loans and $300/month in car payments, those $700/month reduce your available mortgage payment. On a $75,000 salary:
- Gross monthly: $6,250
- Max back-end DTI (43%): $2,688
- Existing debt: −$700
- Available for PITI: $1,988
- Estimated home price: ~$310,000–$345,000 (6.5%, 20% down)
Location Makes the Biggest Difference
The same $100,000 salary buys dramatically different homes depending on location — and state income tax affects take-home, which affects what you can actually pay monthly:
- Austin, TX ($100k salary): Take-home ~$74,500/year. Can afford ~$290,000–$330,000 home.
- Sacramento, CA ($100k salary): Take-home ~$66,000/year (lower due to state taxes). Can afford ~$255,000–$290,000 home — but median home price is $450,000+.
- Columbus, OH ($100k salary): Take-home ~$71,000/year. Median home price ~$250,000. Well within range.
- Nashville, TN ($100k salary): Take-home ~$74,500. Median home price ~$350,000 — stretched but possible with 20% down.
Run the Full Calculation
The two-step process for real affordability:
- See your actual take-home — enter your salary and state in the calculator below. This is the real number your mortgage comes from.
- Run the full affordability calculation — MorgCalc factors in your down payment, interest rate, property taxes, HOA, and insurance to give you a real monthly payment and home price ceiling.
Frequently Asked Questions
How much house can I afford on a $75,000 salary?
What is the 28% rule for home affordability?
Does state income tax affect how much house I can afford?
What credit score do I need to buy a house?
Full affordability calculation
MorgCalc factors in down payment, rate, property taxes, insurance, and HOA to give you a real maximum home price.
Run the full affordability calculation on MorgCalc →Related Articles
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