Forget the “3x your salary” rule
The old rule of thumb — buy a house worth roughly three times your annual income — ignores debt, interest rates, taxes, and insurance, all of which move the real number substantially. Lenders don’t use that math, and neither should you.
The ratio that actually decides it: DTI
Debt-to-income ratio (DTI) compares your total monthly debt payments — including the new mortgage payment — against your gross monthly income. Most loan programs cap DTI somewhere between 43% and 50%, though the strongest approvals usually land well under that ceiling.
Two DTI numbers get checked: front-end DTI (just the housing payment: principal, interest, taxes, insurance, and any HOA dues) and back-end DTI (housing payment plus every other debt — car loans, student loans, credit card minimums, and so on). Back-end DTI is usually the binding constraint, because it’s the one that catches borrowers with otherwise-manageable housing costs but heavy other debt.
Building the real number
Start with gross monthly income, then subtract existing monthly debt obligations. What’s left, multiplied by your program’s DTI ceiling, is roughly the total monthly payment you can carry — and working backward from there, using a current interest rate, gets you to an actual affordable loan amount. This is exactly what our payment calculator on the homepage does when you plug in a home price, down payment, and today’s rate: it shows you the real monthly number, broken into principal and interest versus taxes and insurance, rather than a rough estimate.
Two numbers that matter as much as the sale price
Property tax rates and homeowners insurance vary enormously by location and can shift your real affordable price range more than a lot of buyers expect — Texas in particular carries no state income tax but comparatively higher property tax rates, which is worth building into your number early rather than discovering at closing.
The honest answer to “how much house can I afford” always depends on the specific numbers — income, existing debt, down payment, credit profile, and the loan program you use. Running your actual figures, rather than a generic multiple, is the only way to get a number you can trust.
