How Much House Can You Afford? An Overview for Borrowers

You’re ready to buy a house, but how much house can you afford?

That may sound like a tough question to ask. But knowing the answer can make a big difference in your financial future—the difference between surviving and thriving. Feeling satisfaction versus feeling stress.

So let us give you the information and tools to answer it effectively.

In this blog post, we’ll cover why affordability matters, the true cost of homeownership, and the 28/36 rule, plus the different factors that affect affordability. We wrap it up with an affordability calculator tool that gives you a ballpark idea of how much house you can afford.

So let’s start with the why.

Why Affordability Matters

We’ll get right to the point: what you’re approved for doesn’t always match up with what you can afford.

You may get approved for more than you can manage. Next thing you know, you could find yourself in a situation where your mortgage payment is so high that most of your income is spent on homeownership—leaving little room for anything else.

It can have some serious impact, including: 

• Inability to save.
• Vulnerability to financial setbacks.
• Higher risk of default.
• Less money for things you enjoy.
• Stress on mental health and relationships.

We really don’t mean to stir up fear at this exciting time of getting ready to buy a home. As you know, it can be an incredible source ofwealth creation and peace of mind.

But to achieve that, you need to be aware of the risks of buying a home that’s beyond your means.

The True Cost of Homeownership

It’s a lot more than the mortgage payment. Having a clear view of these recurring and one-time costs will empower you to buy a home within your means.

Recurring Costs

Be prepared to pay these monthly or annually:

• Principal/interest: The heart of your monthly mortgage payment.The principal is the originalamount you borrowed, while the interest is the cost of borrowing, paid to the lender. These are usually combined, and are just the beginning of your recurring costs.
  
• Property taxes: Imposed by local governments to pay for public services (such as schools, emergency services, and more). They vary by location and have gone up significantly recently. The median property tax totaled $3,500 in the U.S. in 2024. See Bankrate’s Property Tax Rates By State to get an idea of what yours could be.
  
• Homeowners insurance: While not legally required, most lenders require it. And it’s a good idea to protect your most valuable asset from theft and damage. Insurance rates can vary widely, averaging $2,397 (about $200 per month) nationally as of this writing.
  
• HOA fees (if applicable): Some properties have homeowner associationfees to cover maintenance, amenities, and related costs. These range from $200 to $300 per month, sometimes costing up to $1,000. Definitely something to be aware of when house hunting.
  
• PMI: Private mortgage insurance is often required when your down payment is less than 20%, which protects the lender if you can’t make your loan payments. It’s included in your monthly mortgage payment and can range from $30 to $70 per $100,000 borrowed. That’s $120 to $280 per month for a $400,000 mortgage loan, so plan accordingly.
  
• Utilities: These may include electric, gas, water, and trash—and they add up fast! Factor in the average cost of utilities in the area you want to move to (don’t be shy about asking for past bills from the seller or your realtor). Or, look up average costs of utilities in the U.S. and by state.
  
• Maintenance and repairs: There’s a rule of thumb that helps you estimate these: maintenance and repairs cost 1 to 3% of your home’s value annually. That’s $4,000 to $12,000 for a $400,000 home. Setting aside at least 1% is a good start.

While these recurring costs can vary, it’s important to calculate how much you could pay each month for them when you think of buying a house.

One-Time Costs

Be prepared to pay these up front when purchasing your home:

• Down payment: The amount you pay up front is important to consider. The go-to is 20%, but if that sounds like a lot, don’t worry: the typical down payment for first-time homebuyers is 9%. At 9%, a $400,000 home would have a down payment of $36,000.
  
• Closing costs: This encompasses the variety of fees you’ll pay to close (appraisal, inspection, and more), which average 2% to 5% of the home’s price for the buyer. You can sometimes negotiate to have the seller cover some of these costs. Expect to pay an additional $8,000 to $20,000 up front on a $400,000 home purchase.
  
• Moving expenses: Also known as “moving is expensive!” Moving expenses include the cost of transportation, meals, lodging, cleaning, and any packing services or materials—so make sure to account for those.Moving costs average $3,020 in 2025.
  
• Getting settled in: You may need furniture, appliances, and other essentials to get settled into your new digs. You’ll want to plan for these as well. The 2025 settling in average is $16,000—butyou can do it for way less if you shop secondhand or bring items with you.

Hanging in there so far? We know, buying a home includes a lot of costs—but there are ways to make it manageable and fit within your budget.

Here’s one of them: the 28/36 rule. 

What Is the 28/36 Rule?

It’s a guideline that can help you keep your lifestyle affordable. It’s pretty simple and has two parts:

1. Up to 28% of your gross monthly income goes toward housing.
2. Up to 36% of your gross monthly income goes toward all debt (housing, credit cards, car loans, etc.).

Here’s how that looks in practice:

Let’s say $6,000 is your gross monthly income (the amount you earn before taxes or other deductions).

• 28% on housing: 6,000 x .28 = $1,680 max on housing.
• 36% on debt: 6,000 x .36 = $2,160 max on debt.

Remember that this is just a rule of thumb to keep you in the range of affordability. In other words, don’t take it as an objective truth.

Also, some lenders use this calculation to help determine your loan amount. 

But lenders may go higher or lower depending on other factors—and it’s up to you to make sure you stay within your budget.

Be careful not to overborrow and end up with more loan than you can handle!

Factors That Impact How Much House You Can Afford

Here’s the full equation that determines affordability—including what’s in your control and what isn’t.

What’s In Your Control

This means financial variables that you can change, either immediately or in the mid or long term.

• Income: Is yours stable or variable? There’s no right or wrong answer, but it helps determine the kind of loan and lender you go with. On that note: if you’re a freelancer, gig worker, artist, entrepreneur—and have a variable income—we specialize in non-traditional mortgage loans to accommodate you.
  
• Down payment: A higher down payment is better if you can afford it—because the more you put down, the less you’ll pay over time. The more you pay up front, the lower your monthly payments. If you pay enough, you may not have PMI to worry about.
  
• Debt: Less debt means more room for housing costs, so try to reduce your debt as much as possible before applying for a mortgage.
  
• Credit score: Per Experian, “a higher credit score can help you qualify for more types of mortgages, a larger loan, a lower down payment, and a lower interest rate.” The 20-point difference between a 680 and 700, for example, is a whole 0.13% (for a 30-year conventional mortgage)!
  
• Lifestyle choices: These factor in as well—including travel, starting a business, and having kids. These expenses vary widely depending on your goals and affect how much home you can afford.

At this point, we want to remind you that Quontic specializes in mortgages of all kinds, especially if you’re self-employed, an investor, a non-U.S. citizen, or have another unique situation. 

What’s Out of Your Control

Conversely, these are variables that depend on factors that go beyond what you can change. That said, keeping a watch on financial context and analyzing different providers can help you better understand prices

• Interest rates: You probably have some familiarity with these since rates dropped to historic lows during the pandemic—then jumped way up. Their volatility is due to multiple factors, including the economy, inflation, politics, and more.
  
• Local home prices: Markets vary wildly. The average home price in California is $813,110, while the average home price in Louisiana is $214,187 (as of August 2025).
  
• Underwriting standards: These vary by lender, but they typically involve income and employment verification to assess your ability to repay, and can be quite stringent. At Quontic, we’re more flexible and take a holistic approach to underwriting.
  
• Loan type and term: There are a variety of mortgage loan types, while the common term lengths are 15, 20, and 30 years. The type of loan you qualify for will affect the size of your payments. A 30-year mortgage will likely mean smaller monthly payments, but more money paid over time. 

Now that you understand all these factors, it’s time for the really exciting part: looking at what affordability looks like for you!

Try the Quontic Home Affordability Calculator

Ready to get an idea of how much house you can afford? Head over to the Quontic Home Affordability Calculator.
All you need to do is enter some basic info, such as:

• Your monthly income.
• Debt expenses.
• Loan term.
• Down payment amount.
• A few other items.

It’s really simple! Feel free to get in there and run a few scenarios.

And remember, this is just a starting point. When you’re ready to take the next step, Quontic is here for you.

We Can Help You Afford Your Home

Whether it’s a traditional or non-traditional mortgage, we can help you secure the home loan that’s best for you.

Once you’ve explored how much house you can afford, start the pre-qualification process!