US United States · Housing affordability
How much house can I afford in the United States?
A household in the United States with gross income of USDa year, with USDin savings available, can afford ...
Maximum purchase price . Conventional mortgage affordability test
USD 250k
Bound by your down payment · USD 200k mortgage on USD 50k down
The two rules
The US has two rules. Both must be met.
Conventional lenders evaluate your mortgage against two constraints. The 36% DTI cap limits what you can borrow; the 20% down payment determines how much cash you need upfront to avoid PMI.
36%
Maximum debt-to-income
Total monthly housing costs — mortgage payment plus property taxes — cannot exceed 36% of gross household income. This is the front-end DTI ratio used by conventional lenders.
housing <= income x 0.36
20%
Down payment
Conventional loans require 20% down to avoid private mortgage insurance (PMI). FHA allows 3.5%, but PMI adds significant cost. We model the conventional uninsured path.
down >= 0.20 x price
Have a place in mind?
Drop in a price and see where it fails.
Each test is independent: you need to clear both. The 36% DTI rule limits your monthly payment; the 20% down payment rule ensures you have enough cash upfront.
USD
2 of 2 tests fail.
36% DTI ruleshort USD 556
You have USD 75k/yrNeed USD 76k/yr
20% down paymentshort USD 10k
You have USD 50kNeed USD 60k
The lever you can actually pull
Two ceilings. Whichever is lower wins.
With your savings fixed, the price you can afford scales linearly with income — until the down payment rule starts to bind. Above the kink, more salary will not buy you a bigger place; more savings will.
What you can affordIncome limit (5.6× gross)Total down (5× cash + pension)
Your monthly budget
What you would actually pay each month.
The US uses the actual rate — no stress test. Your monthly payment at 6.5% over 30 years is what you qualify on and what you pay. Property tax adds about 1.2% of the home value per year.
Monthly headroom
75
The stress test charges you 1.0× what you will actually pay. That spread is what you have, in theory, to absorb a rate cycle, or invest, if you would rather.
Where this lands you
Median home price, by metro area.
Your purchase-price ceiling (drawn in cyan) cuts across the median home price in America's largest metro areas. Cities above the line are out of reach without more income or more savings.
San Francisco
USD 1.30M
Los Angeles
USD 900k
San Diego
USD 850k
New York
USD 750k
Seattle
USD 750k
Boston
USD 860k
Denver
USD 550k
Austin
USD 450k
Phoenix
USD 420k
Atlanta
USD 380k
Chicago
USD 320k
Houston
USD 310k
Within reachOut of reachYour ceiling · USD 250k
Before you sign
This is probably the largest financial commitment of your life.
A home purchase is not just the price tag. There are significant costs on top that are not included in the affordability test above.
2-5%
Closing costs
Lender fees, title insurance, appraisal, attorney fees, and prepaid taxes/insurance typically run 2-5% of the purchase price. These are paid in cash at closing, on top of your down payment.
1-2%
Property tax (annual)
Annual property tax varies widely by state, from 0.3% in Hawaii to over 2.2% in New Jersey. The national average is about 1.1-1.2% of assessed value. Unlike income tax, there is no federal standard.
?
HOA fees & PMI
Condos and planned communities often charge $200-$800/month in HOA fees. If your down payment is below 20%, PMI adds 0.5-1.5% of the loan annually until you reach 20% equity.
None of this means you should not buy. It means you should go in with open eyes. The affordability test tells you what you can do. Whether you should depends on how long you plan to stay, your alternative investments, and the local market dynamics.
For scale
What else costs about USD 250k?
- Four years of out-of-state tuition at a state university · USD 180k1.39×
- A Porsche 911 Carrera · USD 115k2.17×
- Four years of tuition at an Ivy League university · USD 320k0.78×
- $1,500/month invested at 7% nominal for 15 years (portfolio value) · USD 475k0.53×
- A single-family home in Houston (median) · USD 310k0.81×
- A two-bedroom condo in downtown Denver · USD 450k0.56×
- A starter home in the Boston suburbs · USD 580k0.43×
- A one-bedroom apartment in Manhattan (co-op) · USD 750k0.33×
- A three-bedroom home in Seattle's Eastside · USD 950k0.26×
See the full income x down payment matrix
income (down) / savings (right)
USD 30k
USD 60k
USD 100k
USD 200k
30,000/yr
USD 119k
income-bound
USD 119k
income-bound
USD 119k
income-bound
USD 119k
income-bound
50,000/yr
USD 150k
savings-bound
USD 199k
income-bound
USD 199k
income-bound
USD 199k
income-bound
80,000/yr
USD 150k
savings-bound
USD 300k
savings-bound
USD 318k
income-bound
USD 318k
income-bound
120,000/yr
USD 150k
savings-bound
USD 300k
savings-bound
USD 476k
income-bound
USD 476k
income-bound
180,000/yr
USD 150k
savings-bound
USD 300k
savings-bound
USD 500k
savings-bound
USD 715k
income-bound
Gross income used. Property tax at 1.2% included.
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Track every account that feeds into your down payment fund: savings, brokerage, CDs — all in one place. We re-check your affordability against your live balances every night.
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Next steps
Tools and guides to get you there.
Mortgage calculatorBuild an amortization schedule with extra payments. See total interest and how fast you pay it off.CalculateSavings goal plannerSet your down-payment target and a deadline. We back-solve the monthly savings rate you need.PlanCompound interestSee how your down-payment savings grow over time. Visualize the difference one extra year makes.ProjectBuying your first homeA step-by-step guide covering down payments, mortgage options, and the true cost of homeownership.Read
Frequently asked
The front-end debt-to-income ratio limits your total monthly housing costs — mortgage payment, property taxes, and homeowner's insurance — to 36% of your gross monthly income. This is the conventional lending standard used by Fannie Mae and Freddie Mac. The back-end DTI (which includes all debts) is typically capped at 43%, but we model only the housing portion here.
FHA loans are government-insured and allow as little as 3.5% down, but they require mortgage insurance premiums (MIP) for the life of the loan. Conventional loans backed by Fannie Mae/Freddie Mac require 20% down to avoid private mortgage insurance (PMI) but have no ongoing insurance once you reach 20% equity. We model the conventional 20%-down path because it represents the lower long-term cost for most borrowers.
Property taxes range from about 0.3% of assessed value in Hawaii to over 2.2% in New Jersey. The national average is roughly 1.1-1.2%. We use 1.2% as the model default, but your actual tax burden could be significantly different. States like Texas and Illinois have high property taxes but no state income tax, while California has lower property taxes due to Proposition 13 but high income taxes.
Private Mortgage Insurance (PMI) is required by conventional lenders when your down payment is less than 20%. It typically costs 0.5-1.5% of the loan amount annually and protects the lender (not you) if you default. PMI can be cancelled once you reach 20% equity in the home and is automatically terminated at 22% equity under the Homeowners Protection Act. This is why the conventional 20%-down path avoids PMI entirely.
A 15-year mortgage typically has a 0.5-0.75% lower interest rate and saves you tens of thousands in total interest, but the monthly payment is roughly 40-50% higher. A 30-year mortgage gives you lower monthly payments and more cash flow flexibility, which you can invest elsewhere. We model the 30-year fixed because it is the dominant product in the US market (~90% of originations) and represents the baseline most buyers qualify against.
Closing costs cover lender fees, title insurance, appraisal, attorney fees, prepaid taxes and insurance, and recording fees. They typically run 2-5% of the purchase price, with the national average around 3%. Unlike the down payment, closing costs cannot be rolled into a conventional mortgage — they must be paid in cash at closing. Some sellers may agree to contribute toward closing costs, especially in a buyer's market.