How much house can I afford on a $75,000 salary?

On a $75,000 annual salary, using the 28% rule, your maximum monthly housing payment is $1,750. At 6.5% interest for 30 years with a 20% down payment, you can afford a home priced at approximately $340,000-$360,000, depending on property taxes and insurance in your area.

What is the 28/36 rule for mortgages?

The 28/36 rule states that you should spend no more than 28% of your gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt (housing plus car payments, student loans, credit cards). This is the standard guideline used by most lenders to determine loan eligibility.

How much should I put down on a house?

The traditional recommendation is 20% down to avoid Private Mortgage Insurance (PMI). On a $300,000 home, that's $60,000. However, many programs allow 3-5% down (FHA loans require 3.5%). A smaller down payment means a larger loan, higher monthly payments, and PMI costs of $100-300/month until you reach 20% equity.

🏠 Home Buying Guide

How Much House Can I Afford? The Complete 2026 Guide

Updated April 2026 · 7 min read

As a general rule, you can afford a home priced at 3-4.5 times your annual gross income. On a $75,000 salary with a 20% down payment and 6.5% interest rate, you can afford approximately $340,000-$360,000. The key guideline: your monthly housing payment should not exceed 28% of your gross monthly income.

The 28/36 Rule: Your Starting Point

The most widely used affordability guideline is the 28/36 rule, which lenders use to determine loan eligibility. The "28" means your monthly housing costs (mortgage payment, property taxes, homeowner's insurance, and HOA fees) should not exceed 28% of your gross monthly income. The "36" means your total monthly debt payments (housing plus car loans, student loans, credit cards, and other debts) should not exceed 36% of gross income.

Home Affordability by Income (2026, at 6.5%)

Annual Income	Max Monthly Payment (28%)	Max Home Price (20% down)
$50,000	$1,167	$230,000
$75,000	$1,750	$350,000
$100,000	$2,333	$465,000
$125,000	$2,917	$580,000
$150,000	$3,500	$700,000

Down Payment: 20% vs. Less

The traditional recommendation is 20% down to avoid Private Mortgage Insurance (PMI). On a $300,000 home, that's $60,000 upfront. However, many buyers cannot save this amount, and several programs allow smaller down payments: FHA loans require 3.5%, conventional loans accept 3-5%, and VA loans offer 0% for veterans.

The trade-off is clear: a smaller down payment means a larger loan, higher monthly payments, and PMI costs of $100-300/month until you reach 20% equity. On a $300,000 home with 5% down ($15,000), your loan is $285,000 vs. $240,000 with 20% down — a difference of $284/month in payments and $45,000 more in total interest over 30 years.

Hidden Costs Most Buyers Forget

Your mortgage payment is just the beginning. Budget for: Property taxes (0.5-2.5% of home value annually, varies by state), homeowner's insurance ($1,000-3,000/year), maintenance and repairs (budget 1-2% of home value per year), closing costs (2-5% of loan amount, paid upfront), and utilities (typically higher than renting). A $300,000 home can cost $4,000-8,000 per year beyond the mortgage payment.

15-Year vs. 30-Year: Which Is Better?

A 30-year mortgage has lower monthly payments, giving you breathing room. A 15-year mortgage saves enormous amounts on interest. For a $300,000 loan at 6.5%: the 30-year option costs $1,896/month and $382,633 in total interest. The 15-year costs $2,613/month but only $170,389 in total interest — saving you $212,244. If you can comfortably afford the 15-year payment, it's almost always the better financial choice.

🏠 Calculate Your Mortgage Payment

Use our free Mortgage Calculator to see exact monthly payments, amortization schedule, and how extra payments save you money.

Open Mortgage Calculator →