The question every homebuyer asks first — and gets wrong most often. Online calculators show you the maximum a lender might approve, but that's not what you can comfortably afford. The gap between those two numbers is where financial stress lives.
Start with the 28/36 rule: spend no more than 28% of gross monthly income on housing costs (PITI — principal, interest, taxes, insurance) and no more than 36% on total debt. At $80,000 income, that's roughly $1,867/month for housing.
But gross income masks reality. Your take-home after taxes, retirement contributions, and health insurance might be $5,000/month. Spending $1,867 on housing leaves $3,133 for everything else. Is that enough for your lifestyle?
A more conservative approach: use 25% of take-home pay. At $5,000 take-home, that's $1,250/month. With current rates around 6.5%, 20% down, and average taxes/insurance, this supports roughly a $230,000 home. Less exciting than the $320,000 a lender might approve — but far more sustainable.
Factor in costs calculators ignore: maintenance averages 1–2% of home value annually ($2,300–$4,600 on a $230K home), utilities run $200–400/month more than apartment living, and you'll need furniture, lawn care, and an emergency fund for the inevitable surprise repairs.
Bottom line: the bank tells you what you can borrow. Only your budget tells you what you can afford. Run the numbers with our affordability calculator, then subtract 10–15% as a comfort buffer.