First-Time Buyers

How Much House Can You Actually Afford?

May 2026 · 5 min read

There are two numbers that matter: how much a lender will approve you for, and how much you actually want to spend. They are not always the same, and the second one is more important for your peace of mind.

How lenders measure affordability

Lenders focus heavily on your debt-to-income ratio (DTI), which compares your monthly debts plus the new house payment to your gross monthly income. Many programs look for a DTI at or below roughly 43% to 50%.

What is included in the payment

Principal and interest on the loan
Property taxes
Homeowners insurance
Mortgage insurance, if applicable
HOA dues, if the property has them

Set your own comfortable number

A good habit is to pick a monthly payment that still leaves room for savings, retirement, and life. Working backward from a comfortable payment often gives a healthier price range than starting with the maximum approval.

Get pre-approved early so you shop in the right range and can move fast when you find the right home.

This article is general education, not financial, legal, or tax advice, and not a commitment to lend. Loan programs, rates, and requirements vary by lender, county, and borrower and can change. Talk with a licensed loan officer about your specific situation.

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