On a $70,000 salary, most first-time buyers can comfortably afford a home priced at roughly $175,000–$200,000. The exact number depends on your down payment, your other debts, local property taxes and your mortgage rate. Here’s how to work out your own.
Step 1: Start with the 28% rule
A common guideline is to keep your total housing payment at or below 28% of your gross monthly income. That payment includes principal, interest, property tax, homeowners insurance and any PMI.
$70,000 ÷ 12 = $5,833 a month. 28% of that is about $1,633 a month.
Step 2: Check your other debts (the 36% rule)
Lenders also look at your debt-to-income ratio (DTI): all monthly debt payments divided by gross monthly income. A comfortable ceiling is 36%, which is $2,100 a month on $70,000.
If you have a $350 car payment and a $100 student loan payment, that leaves $1,650 for housing — about the same as the 28% figure. With more debt than that, the 36% limit becomes the tighter one and your budget shrinks.
Step 3: Take out taxes and insurance
Property tax and insurance vary a lot by state. Start with about $400 a month, then look up real figures for the area you’re considering. That leaves about $1,233 a month for principal and interest.
Step 4: Turn the payment into a price
At 7.4% on a 30-year loan (roughly the Freddie Mac average in mid-October 2026), $1,233 a month supports a loan of about $178,000. With 5% down, that’s a home price of roughly $187,000. If rates drop to 6.5%, the same payment supports about $195,000 and a price of roughly $205,000.
Rates change every week, so plug in today’s rate. A difference of half a percentage point moves your budget by roughly $10,000.
How much house can you afford?
Uses the same steps as this article: the 28% and 36% rules, minus taxes and insurance, turned into a price.
Estimated home price
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| Principal & interest | – |
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| Property tax + insurance | – |
| Total housing payment | – |
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Estimates for education only. Rates and costs vary; confirm with a licensed lender. PMI is not shown separately: with less than 20% down, expect it to take part of this budget.
What can change the number
- A bigger down payment raises your price range and can remove PMI.
- Low-tax areas can add $20,000 or more to your budget compared with high-tax ones.
- Higher-interest debt (car loans, credit cards) lowers it fast.
Approved vs. comfortable
A lender may approve you for more than this, sometimes up to a 43–50% DTI. Approval is the most a lender will lend, not what’s comfortable to pay. Leave room for repairs, savings and life.
Run your own numbers: use the affordability calculator above. It does this same math for any salary, debt load and rate.
Module 2 of the HomeLooker course covers how lenders look at debt-to-income, how to set a budget that leaves room for the rest of your life, and how to decide whether renting longer makes more sense.
See what’s in Module 2 →$47 one-time · 30-day money-back guarantee
Educational content only, not financial advice. Confirm figures with a licensed lender.
Down payments, the real monthly cost, inspections and closing day, explained simply. You’ll also get occasional emails about buying a home and the course. No spam, unsubscribe anytime.