← Blog · May 25, 2026 · mortgage, affordability
How Much House Can You Afford on a $100K Salary?
On a $100,000 gross salary at 2026 mortgage rates near 7%, a sustainable purchase price is about $295,000 with 10% down — not the $420,000 figure a lender will pre-approve. The lender uses your maximum debt-to-income ratio; the sustainable number uses what actually leaves room for retirement, emergencies, and a life.
The lender math vs the sustainable math
Lenders typically cap your total debt-to-income (DTI) at 43-50%. On $100k gross ($8,333/month), that is up to $4,166/month in total debt payments including the mortgage. Subtract a $400 car payment and a $200 student loan and you have $3,566 for principal, interest, taxes, and insurance (PITI). At 7% with 1.2% property tax and 0.5% insurance, that supports about a $420,000 home with 10% down.
That is the maximum the lender will allow. It is also the number that makes you house-poor. The sustainable rule is 28% of gross income for PITI — about $2,333/month — which supports roughly a $295,000 home with 10% down.
| Approach | Monthly PITI | Home price (10% down) | What it leaves |
|---|---|---|---|
| Lender max (43% DTI) | $3,566 | $420,000 | House-poor — nothing for retirement |
| Traditional (28% of gross) | $2,333 | $295,000 | Room for 15% retirement + life |
| Conservative (25% of net) | $1,875 | $240,000 | Generous savings rate, vacations |
The full breakdown on $295,000
At a $295,000 purchase price with 10% down ($29,500), the loan is $265,500. At 7% over 30 years, the P&I is $1,766/month. Add ~$300 for property tax (1.2%), $125 for insurance, and roughly $140 for PMI (under 20% down) and the all-in monthly is around $2,330 — exactly 28% of gross on a $100k salary.
Over 30 years the total interest paid is about $370,000. So the $295,000 home costs $665,000 by the time the loan is gone. That is normal — and a reason not to stretch to $420,000.
What changes the answer
- Down payment. 20% down on the same home cuts PMI ($140/mo) and lets you borrow less. Same $2,330 budget supports roughly a $315,000 home with 20% down vs $295,000 with 10%.
- Other debt. A $500 car payment eats $90,000 of buying power. Pay off cars before house-shopping if you can.
- Property tax. A 2.5% tax state (NJ, IL, TX) reduces buying power by about 15% versus a 0.5% state (HI, AL).
- HOA. A $400 HOA cuts buying power by about $60,000 at 7%.
- Income type. Variable income (commissions, bonus, 1099) should be sized using base only, not total comp.
The 28/36 rule, properly applied
The classic rule: housing under 28% of gross income, total debt under 36%. On $100k that is $2,333 housing, $3,000 total debt. The reason it held up for decades is that it leaves room for 15% retirement contributions, taxes, an emergency fund, food, transportation, and a modest discretionary budget. The lender's 43% DTI rule does not.
What about dual income at $100k each?
Combined $200k gross supports roughly a $590,000 home using the 28% rule, or about $840,000 at the lender max. Same caveat: the lender max is usually a bad idea. Also stress-test against single income — if either partner could lose their job, the mortgage should still be payable on one salary plus emergency fund for 6+ months.
Run your scenario
- Affordability Calculator — exact home price you can afford
- Mortgage Calculator — monthly payment on any loan
- DTI Calculator — see what lenders will actually approve
- Down Payment Calculator — how 10% vs 20% changes everything
- Closing Costs — the 2-5% lump sum people forget about