The amount a lender will approve and the amount you should comfortably spend aren't always the same. Setting a realistic budget protects you from becoming "house poor" — owning a home but having little left for everything else.
The 28/36 Rule
A common guideline: keep your housing costs at or below 28% of your gross monthly income, and your total debt payments at or below 36%. Lenders may allow higher, but these ratios are a sensible starting point for a comfortable budget.
Costs Beyond the Mortgage Payment
Your monthly cost is more than principal and interest. Budget for:
- Property taxes — vary widely by location.
- Homeowners insurance — required by lenders.
- Mortgage insurance — if your down payment is under 20% (loan-dependent).
- HOA fees — for some communities.
- Maintenance — a rough rule is ~1% of the home's value per year.
Ready to see what loan amount you may qualify for?
Check My OptionsDon't Forget Upfront Cash
Beyond the down payment, you'll need closing costs (often 2–5% of the loan) and ideally a savings cushion. Factor these in so you're not stretched thin the moment you move in.
Buy for Your Real Life
Just because you're approved for a number doesn't mean you should spend it. Leave room for savings, emergencies, and the life you want to live in the home — not just in it.