How much house can I afford on a $85,000 salary?

With an $85,000 salary, $500 monthly debts, $60,000 down payment, and a 36% DTI limit, you can typically afford a home around $350,000-$380,000. The exact amount depends on your interest rate, property taxes, and insurance costs. Use the calculator above for your specific numbers.

What is DTI and why does it matter?

DTI (debt-to-income ratio) is your total monthly debt payments divided by gross monthly income. Lenders use two DTI ratios: front-end (housing costs only, typically max 28%) and back-end (all debts, typically max 36-43%). This calculator uses the back-end DTI, which is the binding constraint for most buyers.

Should I put 20% down on a house?

20% down avoids PMI (private mortgage insurance), which saves $100-300/month. But it's not required — FHA loans accept 3.5% down, conventional loans as low as 3%. Putting less down means a larger loan and higher monthly payments, but gets you into a home sooner.

What costs beyond the mortgage should I budget for?

Budget for property taxes (0.5-2.5% of home value annually), homeowner's insurance ($1,000-3,000/year), maintenance (1% of home value/year), HOA fees if applicable, and closing costs (2-5% of loan amount). The 'true' cost of homeownership is typically 30-50% more than just the mortgage payment.

Home Affordability Calculator

How much house can you afford? Enter your income and debts to find out.

Your finances

Annual income

Monthly debts

Car payments, student loans, credit cards, etc.

Down payment

Interest rate

Loan term

DTI limit

Max debt-to-income ratio (36% is standard)

Property tax rate

Annual rate, varies by county

Homeowner's insurance

Annual premium

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How to Use This Calculator

Income

Enter your gross annual household income — the combined total before taxes. This is the starting point lenders use to determine how much mortgage payment you can handle each month.

Monthly debts

Add up your recurring monthly obligations: car payments, student loans, credit card minimums, personal loans, and any other fixed debt payments. The calculator subtracts these from your allowable monthly housing budget.

More Options

Expand "More Options" to fine-tune your estimate. You can adjust the down payment amount, interest rate, loan term (15 or 30 years), debt-to-income ratio (DTI), property tax rate, and homeowners insurance. These all affect how much home you can afford.

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Every input is encoded in the URL. Click Share, send the link — they'll see your exact numbers. No re-entering, no screenshots.

The Formula

Lenders use your debt-to-income ratio to cap your total monthly obligations. The calculator works backwards from that cap to find the maximum home price you can afford.

Max Monthly Payment = (Annual Income ÷ 12) × DTI% − Monthly Debts

Max Loan = Payment × [(1 + r)ⁿ − 1] ÷ [r × (1 + r)ⁿ]
where r = monthly interest rate, n = number of payments

Max Home Price = Max Loan + Down Payment

The first line determines how much of your monthly income is available for a mortgage after existing debts. The second line is the present-value annuity formula — it converts a monthly payment into the total loan amount a lender will approve. Adding your down payment gives the maximum purchase price.

Example

Mark & Lisa — shopping for their first home

Mark and Lisa have a combined income of $120,000 and $800/month in existing debt payments. They've saved $80,000 for a down payment and are looking at 30-year fixed mortgages at 6.5%. Their lender uses a 36% DTI limit.

Inputs

Gross annual income$120,000

Monthly debts$800

Down payment$80,000

Interest rate6.5%

Loan term30 years

DTI ratio36%

Result

Max monthly payment($120,000 ÷ 12) × 36% − $800 = $2,800

Max loan amount~$340,000

Max home price~$420,000

With $80,000 down and a $340K mortgage, Mark and Lisa can afford a home up to roughly $420,000 while staying within lender guidelines.

FAQ

What DTI ratio do lenders want? ▼

Most lenders follow the 28/36 rule. Your housing costs (mortgage, taxes, insurance) shouldn't exceed 28% of gross monthly income, and your total debt payments shouldn't exceed 36%. Some loan programs (FHA, VA) allow higher ratios — up to 43% or even 50% with strong compensating factors like a large down payment or excellent credit. This calculator uses total DTI, which you can adjust under "More Options."

How much house can I afford on a $100K salary? ▼

With a $100,000 salary, 36% DTI, no other debts, 6.5% rate, and 30-year term, your max monthly payment is about $3,000. That supports roughly a $475K loan. Add a $50K down payment and you're looking at a home around $525K. But if you carry $500/month in car and student loan payments, your budget drops to about $395K. The answer depends heavily on your debts, rate, and down payment — plug in your real numbers above.

Does a larger down payment increase how much home I can afford? ▼

Yes — but not by changing your monthly payment limit. Your DTI determines the maximum mortgage payment, which sets the maximum loan amount. A larger down payment is added on top of that loan amount, directly raising the purchase price dollar for dollar. It also eliminates PMI (if you put 20%+ down), which frees up more of your monthly budget for the actual mortgage payment.

What hidden costs of homeownership should I plan for? ▼

Beyond the mortgage payment, budget for property taxes (typically 0.5–2.5% of home value per year), homeowners insurance ($1,000–$3,000+/year), PMI if your down payment is under 20%, HOA fees if applicable, and maintenance (a common rule of thumb is 1% of the home's value per year). Closing costs usually run 2–5% of the purchase price. These extras can add $500–$1,500+ per month on top of your mortgage.

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