Penny Runs the NumbersAt a 7.18% rate with 20% down, the 28/36 rule lets a $70,000 salary buy a home of about $240,756 ($1,633 a month including tax and insurance). The median US home ($417,500) takes a salary of $116,669. Under Fannie Mae's 45% debt-to-income limit the same $70,000 qualifies for about $401,711.
What the calculator shows
Set your gross salary, down payment, mortgage rate and other monthly debts, then pick a debt-to-income limit. The cards show the most expensive home you can buy, the full monthly payment (principal, interest, property tax, insurance and PMI) and the salary you would need for the median US home.
The chart compares four common salaries, $50K, $70K, $100K and $120K, with your own salary and the median existing-home price from the National Association of Realtors. The default rate is Freddie Mac's latest 30-year average.
The 28/36 rule vs what lenders allow
The 28/36 rule of thumb keeps housing at or below 28% of gross income and all debts at or below 36%. On $70,000 that caps the payment at $1,633 a month and the home at about $241K. On $50K it is about $165K, on $100K about $354K and on $120K about $430K.
Lenders go further. Fannie Mae's Selling Guide allows a total debt-to-income ratio of 36% for manually underwritten loans, up to 45% with strong credit and reserves, and up to 50% through its automated Desktop Underwriter. At 45% the same $70,000 salary qualifies for about $402K with a $2,625 payment; at 50% for about $449K with a $2,917 payment, half of gross pay before taxes.
Debts and rates
Under 28/36, small debts barely matter, because the 28% housing limit binds first: a $500 car payment lowers the maximum price on $70K by only about $5K. Under the 45% limit every dollar of debt comes straight out of the housing budget, and the same $500 payment costs about $81K of house.
Lower rates help, but less than many expect: at 6% a $70,000 salary buys about $268K under 28/36, and even at 3% only about $361K, still below the median home.
Questions
How much house can I afford on $70,000 a year?
With 20% down at 7.18%, about $240,756 under the 28/36 rule, for a $1,633 monthly payment including property tax and insurance. If a lender uses Fannie Mae's 45% debt-to-income limit, about $401,711.
What salary do I need to buy a median-priced home?
For the $417,500 median existing home, with 20% down at 7.18% and no other debts, you need about $116,669 a year under the 28/36 rule, or about $72,594 under a 45% debt-to-income limit.
What is the 28/36 rule?
A traditional guideline: spend no more than 28% of gross monthly income on housing (principal, interest, property tax, insurance) and no more than 36% on all debts combined. It is not a legal or Fannie Mae limit; Fannie Mae's maximum total debt-to-income ratio is 36% to 45% for manual underwriting and 50% for Desktop Underwriter loans.
What does this calculator leave out?
HOA dues, closing costs, cash reserves and income taxes. Insurance ($1,800 a year) and PMI (0.5% of the loan a year below 20% down) are assumptions; property tax uses the national Census ratio of 0.89%, and local rates vary widely.
Sources and assumptions
- 30-year fixed-rate mortgage average, week of 2026-11-05: Freddie Mac Primary Mortgage Market Survey (PMMS) (checked 2026-11-11)
- Median existing-home price, all housing types, September 2026: National Association of Realtors, Existing-Home Sales (released 2026-10-13) (checked 2026-11-11)
- Maximum total debt-to-income ratio: 36% manual underwriting, up to 45% with credit-score and reserve requirements, 50% for Desktop Underwriter loans: Fannie Mae Selling Guide B3-6-02, Debt-to-Income Ratios (checked 2026-11-11)
- Effective property tax rate: median real estate taxes paid ($3,211, table B25103) / median owner-occupied home value ($360,600, table B25077), United States, 2024: U.S. Census Bureau, American Community Survey 2024 1-year estimates (checked 2026-11-11)
- ASSUMPTION: homeowners insurance premium: assumption based on Freddie Mac research: average annual premium $1,522 in 2023 (single-family, 30-year fixed conventional loans), +10.8% vs 2022 (checked 2026-11-11)
- Maximum price is where the full housing payment (principal, interest, property tax, insurance, PMI) reaches the chosen debt-to-income limit.
- Income is gross (before tax), as lenders measure it. 30-year fixed loan, monthly compounding.
- No HOA dues, closing costs or cash reserves. The down payment is assumed to be available in cash.
- PMI applies while the down payment is under 20%, at a flat 0.5% of the loan per year (assumption).
Last updated 2026-11-11.