Before you fall in love with a house, you need to know if you can actually afford it. This is the question millions of people ask every year — and the answer depends on more than just your salary. Your down payment, monthly debts, credit score, and the current interest rate all play a role. This guide walks you through exactly how much house you can afford in 2026, with real examples for the USA, UK, and Canada.
"The most dangerous words in real estate are: I think I can afford it. Know before you buy."
Most financial experts and lenders in the USA use the 28/36 rule as the starting point for mortgage affordability. This rule states two things:
If you earn $6,000 per month before tax, your maximum mortgage payment under the 28% rule is $1,680 per month. Your total debt payments should not exceed $2,160 per month.
Here is a quick reference table showing the approximate maximum home price you can afford at different income levels in the USA, assuming a 10% down payment, 6.5% interest rate, and 30-year term:
| Annual Income | Max Monthly Payment (28%) | Approximate Home Price |
|---|---|---|
| $40,000 | $933 | ~$130,000 |
| $60,000 | $1,400 | ~$195,000 |
| $80,000 | $1,867 | ~$265,000 |
| $100,000 | $2,333 | ~$330,000 |
| $120,000 | $2,800 | ~$395,000 |
| $150,000 | $3,500 | ~$495,000 |
| $200,000 | $4,667 | ~$660,000 |
In the UK, lenders typically use income multiples rather than percentage rules. Most UK lenders will offer between 4 and 4.5 times your annual salary as a maximum mortgage. Some lenders will go up to 5 times for high earners or professionals.
For a joint application in the UK, lenders combine both incomes. A couple earning £35,000 each (£70,000 combined) could borrow up to £315,000 at 4.5 times income, allowing them to buy a property worth around £350,000 with a 10% deposit.
Canada uses the Gross Debt Service (GDS) and Total Debt Service (TDS) ratios. Your GDS ratio — housing costs divided by gross income — should not exceed 39%. Your TDS ratio — all debt payments divided by gross income — should not exceed 44%. Additionally, the Canadian mortgage stress test requires you to qualify at your actual rate plus 2%, or 5.25%, whichever is higher.
A larger down payment directly increases how much house you can afford by reducing your loan amount and monthly payment. It also eliminates Private Mortgage Insurance (PMI) in the USA and CMHC insurance in Canada if you reach 20%, saving hundreds of dollars per month.
A higher credit score means a lower interest rate. The difference between a 680 credit score and a 760 credit score can be 0.5% to 1% in interest rate, which on a $300,000 loan translates to $100 to $200 per month in savings — and over $40,000 over the life of the loan.
Car loans, student loans, and credit card payments all reduce how much mortgage you qualify for. Paying off a $400/month car loan before applying for a mortgage can increase your affordable home price by approximately $55,000 in the USA at current rates.
At 5% interest, a $1,500/month payment supports a loan of approximately $279,000. At 7% interest, that same $1,500/month only supports a loan of approximately $225,000 — a difference of $54,000. Current rates in 2026 are around 6.47% in the USA, 5% in the UK, and 5.2% in Canada.
A 30-year term gives you lower monthly payments and lets you qualify for a larger home. A 15-year term saves enormous amounts in interest but reduces how much you qualify for because the monthly payment is higher. Use our mortgage calculator to compare both options side by side.
Calculate Your Mortgage Now →On a $50,000 annual salary, your maximum monthly mortgage payment under the 28% rule is approximately $1,167. At a 6.5% interest rate over 30 years, this supports a loan of roughly $185,000. With a 10% down payment of $20,500, you could afford a home priced at around $205,000. If you have no other debts and a strong credit score, some lenders may stretch this slightly higher.
On a $100,000 annual salary with no other debts, your maximum monthly mortgage payment is approximately $2,333 under the 28% rule. At 6.5% over 30 years, this supports a loan of around $370,000. With a 10% down payment, you could afford a home priced at approximately $410,000. A 20% down payment would increase your purchasing power to around $460,000.
The debt-to-income ratio (DTI) compares your total monthly debt payments to your gross monthly income. For a mortgage, most US lenders want your front-end DTI (mortgage payment only) below 28% and your back-end DTI (all debts) below 36% to 43%. FHA loans allow a back-end DTI up to 50% in some cases. UK lenders and Canadian lenders use similar but slightly different formulas.
Yes, but student loans reduce how much mortgage you qualify for. Lenders count your monthly student loan payment as part of your total debt. On a $70,000 salary with $400/month in student loans, your maximum mortgage payment drops from $1,633 to $1,233 per month — reducing your affordable home price by approximately $63,000. Refinancing student loans to lower the monthly payment before applying for a mortgage can help.
This depends on your location, financial situation, and how long you plan to stay. In most US, UK, and Canadian cities in 2026, monthly mortgage payments on a median-priced home are higher than equivalent rent for the same property. However, buying builds equity and provides stability. The general rule is that buying makes more sense if you plan to stay in the same location for at least 5 to 7 years.