On a $100,000 household income, most lenders will approve a home price of roughly $300,000 to $390,000 in 2026. Where you land in that range depends on your down payment, your interest rate, your other monthly debts, and local property taxes. This guide shows the math lenders use, so you can adjust it to your own situation.
The 28/36 rule: how lenders size your budget
Most US lenders start with two debt-to-income (DTI) limits:
- Front-end ratio (28%): your total housing payment should stay at or below 28% of gross monthly income. That covers principal, interest, property tax, homeowners insurance, PMI and any HOA dues. On $100,000 a year ($8,333 a month), the limit is $2,333 a month.
- Back-end ratio (36%): housing plus all other monthly debt payments (car loans, student loans, minimum credit card payments) should stay at or below 36%, or $3,000 a month.
Whichever limit is lower sets your budget. With less than $667 a month in other debts, the 28% front-end limit is the one that binds. Above that, every extra dollar of debt payment lowers the housing payment you can take on.
Many loan programs allow more. Conventional loans run through automated underwriting often approve back-end DTI of 43%–50%, and FHA can go higher. But 28/36 is a sensible guide to what is comfortable, not just what you can get approved for.
What $2,333 a month buys
The payment has to cover more than the loan. For the figures below we assume property tax of 1% of the price a year (close to the national median), homeowners insurance of $1,800 a year, and PMI of 0.5% a year on conventional loans with less than 20% down (0.55% FHA mortgage insurance at 3.5% down).
| Down payment | At 6.0% | At 6.5% | At 7.0% |
|---|---|---|---|
| 3.5% (FHA) | $309,000 | $296,000 | $284,000 |
| 5% | $315,000 | $302,000 | $289,000 |
| 10% | $331,000 | $317,000 | $303,000 |
| 20% (no PMI) | $388,000 | $371,000 | $355,000 |
Two patterns stand out. Each half-point of rate changes your maximum price by about $13,000–$17,000. And reaching 20% down raises your budget by more than the extra cash you put in, because you stop paying PMI and borrow less.
Worked example: 10% down at 6.5%
A $317,000 home with $31,700 down means a loan of $285,300. The monthly payment breaks down like this:
- Principal and interest (30-year fixed at 6.5%): ~$1,801
- Property tax (1% a year): ~$264
- Homeowners insurance: $150
- PMI (0.5% a year): ~$119
- Total: ~$2,334 a month, right at the 28% line.
At closing you would also need 2%–5% of the price for closing costs (about $6,000–$16,000) plus a cash reserve. Many lenders like to see two months of payments left in savings after closing.
How other debts change the answer
Using the same 10% down and 6.5% rate:
- $0–$667 a month in debts: the front-end limit binds, and the maximum stays around $317,000.
- $900 a month (a car payment plus student loans): the back-end limit leaves $2,100 for housing, and the maximum drops to about $283,000.
Paying off a $400-a-month car loan before you apply can add $50,000 or more to your budget. That is often a better use of cash than a slightly larger down payment.
Where $100K goes furthest, and where it doesn't
Property tax is the biggest local variable. At the same $2,333 a month, a buyer in a low-tax state like Alabama (about 0.3%) or Hawaii can afford a noticeably higher price than a buyer in New Jersey or Illinois (over 2%). There, taxes alone can take $600–$700 of the monthly budget. See our property tax by state guide, or open your state's page in the mortgage calculator to use local tax and insurance averages.
Insurance matters too. In Florida, Louisiana and parts of Texas, premiums of $4,000–$6,000 a year can cut buying power by $30,000–$50,000 compared with our $1,800 assumption.
Five ways to afford more on $100K
- Improve your credit score before you apply. Going from 680 to 760 can lower your rate by several tenths of a point and cut PMI in half.
- Use down payment assistance. Every state housing finance agency offers first-time buyer programs. They are listed on each state's page in our mortgage calculator.
- Pay down or pay off installment debt to move from the 36% limit back to the 28% limit.
- Buy points if you plan to stay long enough to reach the break-even point. Our mortgage points calculator shows when it pays off.
- Shop insurance and look at lower-tax areas nearby. Crossing a county line can change your taxes by hundreds of dollars a month.
Bottom line
A $100,000 income comfortably supports a home price of about $300,000–$320,000 with a small down payment, or about $370,000–$390,000 with 20% down, at today's rates. Use the affordability calculator to enter your exact debts, rate and local taxes. Keep in mind that a lender may approve more than the payment you are comfortable making.
Published September 22, 2026. Figures are estimates for education only, not financial advice; program rules and rates change, so confirm with a licensed lender. Spotted an error? Let us know.