On an $80,000 salary, the common 28/36 guideline suggests a total housing payment of about $1,867 per month (28% of $6,667 gross monthly income). With roughly $450 a month for property tax and insurance, that leaves about $1,417 for principal and interest. At a 6.5% 30-year rate that supports a loan near $224,132, or a home price near $249,036 with 10% down.
How the 28/36 rule works
The front-end ratio limits housing costs to about 28% of gross income. The back-end ratio limits total debt, including housing, to about 36%. The lower of the two limits your housing budget. Here, 36% of $6,667 is $2,400, so existing debts reduce what remains for housing once they exceed about $533 a month.
Effect of existing monthly debts (6.5%, 30-year, 10% down)
| Other monthly debts | Housing budget | Principal & interest | Loan amount | Approx. price |
|---|---|---|---|---|
| $0 | $1,867 | $1,417 | $224,132 | $249,036 |
| $400 | $1,867 | $1,417 | $224,132 | $249,036 |
| $800 | $1,600 | $1,150 | $181,942 | $202,158 |
Effect of the interest rate
Assuming no other debts and $450 a month for taxes and insurance:
| Rate | Loan supported | Approx. price (10% down) |
|---|---|---|
| 5.5% | $249,506 | $277,229 |
| 6.0% | $236,288 | $262,542 |
| 6.5% | $224,132 | $249,036 |
| 7.0% | $212,936 | $236,595 |
| 7.5% | $202,608 | $225,120 |
Practical tips
- Test your actual taxes and insurance, which vary by location.
- Keep an emergency fund after closing costs and the down payment.
- Many households choose a payment below the maximum for flexibility.
- Pay down high-interest debt first when it shrinks your debt-to-income ratio.
Enter your own income, debts and rate in the Mortgage Affordability Calculator, and check your ratio with the Debt-to-Income Calculator.
Step-by-step calculation
- Divide annual income by 12 to get gross monthly income: $80,000 ÷ 12 = $6,666.67.
- Multiply by 28% for the front-end limit: about $1,866.67.
- Multiply by 36% for the back-end limit: $2,400, then subtract your other monthly debts.
- Take the lower of the two numbers as your housing budget.
- Subtract estimated property tax and insurance to find the principal-and-interest budget.
- Convert that payment to a loan amount using the interest rate and term, then add your down payment to estimate price.
Costs people forget
- Closing costs, commonly a few percent of the loan amount (see our closing costs guide).
- Moving costs, repairs and furnishing.
- Utilities, HOA dues and ongoing maintenance.
- Loss of flexibility if income or expenses change.
Other lending rules
Some loan programs allow higher ratios, and some lenders are stricter. Government-backed programs have their own limits, so check program rules with a lender or housing counselor.
Common questions
How much house can I afford on an $80,000 salary?
Under the 28/36 guideline, roughly a $1,867 monthly housing payment, which supports a home near $249,036 at 6.5% with 10% down, assuming no other debts and $450 a month for taxes and insurance.
Does the 28/36 rule guarantee approval?
No. It is a planning guideline. Lenders apply their own criteria, including credit score and reserves.
How do other debts change what I can afford?
Car, student loan and card payments count toward the 36% limit, which can reduce the housing budget once they exceed about $533 a month on this income.