Lenders will approve you for more than you should borrow. The actual safe number is 28% of gross monthly income. On $80k/year that's $1,867/month. Everything above that is their risk tolerance, not yours.
The 28% rule is the front-end DTI limit most conventional lenders use. It means your total housing payment (principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income. Below is what that looks like at common income levels.
| Annual income | Max payment at 28% | Safe home price (est.) |
|---|---|---|
| $50,000 | $1,167/mo | ~$175,000 |
| $60,000 | $1,400/mo | ~$210,000 |
| $80,000 | $1,867/mo | ~$280,000 |
| $100,000 | $2,333/mo | ~$350,000 |
| $120,000 | $2,800/mo | ~$420,000 |
| $150,000 | $3,500/mo | ~$525,000 |
| $200,000 | $4,667/mo | ~$700,000 |
Max payment = 28% of gross monthly income. Home price estimate assumes 10% down, 6.4% rate, 30-year fixed, ~1.2% property tax, $150/mo insurance. Actual amounts vary.
Calculate your exact maximum →The 28% rule uses gross income before taxes. On $80k/year your gross is $6,667/month, but take-home after federal tax, state tax, and FICA is closer to $5,000–$5,400. A $1,867 payment feels very different against $5,200 net than it does against $6,667 gross. Some financial planners suggest targeting 25% of net income instead, which on $80k works out to roughly $1,300/month.
The 28% rule only counts housing. But lenders also apply a back-end DTI limit of 43–45%. This includes your mortgage plus all other debts combined. If you have a $500/month car payment and $300/month in student loans, your actual safe mortgage payment drops significantly. On $80k/year with $800/month in existing debts, your real comfortable mortgage ceiling drops to roughly $1,067/month instead of $1,867.
Approved ≠ affordable. Lenders will approve you up to 43–45% back-end DTI. That's their limit, not your comfort zone. Always run your own number.
Comfortable
Under 25%
of gross monthly income
You sleep fine. Payment leaves room for savings, repairs, and an unexpected month. This is the target, not the ceiling.
Manageable
25–33%
of gross monthly income
Works at stable income. Gets tight if income drops, hours get cut, or a large expense hits at the same time as the mortgage is due.
Stretch
33–40%
of gross monthly income
You're borrowing against income stability. One job change, one medical bill, one bad month and the payment becomes the problem. Lenders allow this, but it carries real risk.
Danger zone
Above 40%
of gross monthly income
Most lenders will decline here. If approved, a payment at this level leaves almost no margin for anything else. Strongly reconsider the home price or timeline.
The table above gives you the benchmark. These tools give you the exact number for your income, debts, and down payment.
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