Direct Answer
On an $80,000 salary, you can afford roughly a $225,000 to $265,000 home depending on your state’s property tax rate. At $120,000, the range is $350,000 to $400,000. At $150,000, it’s $450,000 to $520,000. Property taxes cause the widest variation — the same income can support $40,000 more home in Colorado than in New Jersey because tax rates differ by 4x. Use the Home Affordability Calculator with your actual income, down payment, and location.
Last verified on: June 4, 2026
Editorial note: This guide estimates home affordability using the standard 28/36 DTI (debt-to-income) rule with current mortgage rates and state-level property tax data. It models conventional loans with 10% down at 6.5% interest. Actual loan qualification depends on your full credit profile, DTI ratio, down payment, and lender-specific guidelines. This is not a pre-approval or loan guarantee.
Research method: Daily Calcs used the 28/36 DTI (debt-to-income) framework with a 6.5% fixed rate, 10% down payment, and $100/month for homeowners insurance across all scenarios. Property tax rates come from configured state-level mortgage data sourced from official tax authorities. PMI (private mortgage insurance) is included for down payments under 20% at 0.65% of the loan amount. All sources verified on June 4, 2026.
How the 28/36 Rule Works
Lenders use two ratios to determine how much mortgage you can handle:
| Ratio | What it includes | Conventional limit |
|---|---|---|
| 28% — Housing ratio | Principal, interest, taxes, insurance, PMI (PITI) | Up to 28% of gross monthly income |
| 36% — Total debt ratio | Housing + car loans, student loans, credit cards, other debt | Up to 36% of gross monthly income |
For a buyer with $120,000 salary ($10,000/month gross):
- 28% housing limit: $2,800/month
- 36% total debt limit: $3,600/month
If you have a $400/month car payment, your available housing budget drops to $2,400/month ($3,600 − $400 − $800 buffer for other debt).
Affordability by Salary Tier
All scenarios: 6.5% rate, 10% down, $100/month insurance, no other debt. Prices rounded to nearest $5,000.
$80,000 Salary ($6,667/month gross)
Max housing payment (28%): $1,867/month
| State (tax rate) | Est. home price | Monthly P&I | Monthly tax | Monthly PMI + insurance | Total housing |
|---|---|---|---|---|---|
| Colorado (0.55%) | $265,000 | $1,511 | $109 | $240 | $1,860 |
| Virginia (0.95%) | $250,000 | $1,421 | $178 | $223 | $1,822 |
| Texas (1.54%) | $230,000 | $1,309 | $265 | $204 | $1,778 |
| New Jersey (2.2%) | $225,000 | $1,280 | $371 | $199 | $1,850 |
$120,000 Salary ($10,000/month gross)
Max housing payment (28%): $2,800/month
| State (tax rate) | Est. home price | Monthly P&I | Monthly tax | Monthly PMI + insurance | Total housing |
|---|---|---|---|---|---|
| Colorado (0.55%) | $400,000 | $2,280 | $165 | $310 | $2,755 |
| Virginia (0.95%) | $380,000 | $2,160 | $270 | $294 | $2,724 |
| Texas (1.54%) | $350,000 | $1,992 | $404 | $270 | $2,666 |
| New Jersey (2.2%) | $340,000 | $1,934 | $561 | $262 | $2,757 |
$150,000 Salary ($12,500/month gross)
Max housing payment (28%): $3,500/month
| State (tax rate) | Est. home price | Monthly P&I | Monthly tax | Monthly PMI + insurance | Total housing |
|---|---|---|---|---|---|
| Colorado (0.55%) | $520,000 | $2,956 | $214 | $325 | $3,495 |
| Virginia (0.95%) | $490,000 | $2,783 | $348 | $306 | $3,437 |
| Texas (1.54%) | $450,000 | $2,556 | $519 | $281 | $3,356 |
| New Jersey (2.2%) | $440,000 | $2,499 | $726 | $275 | $3,500 |
What Changes Your Affordability the Most
Down payment size
Going from 10% down to 20% down eliminates PMI and reduces the loan balance. On a $300,000 home, that saves roughly $150 to $250 per month — enough to qualify for a higher-priced home.
Property tax rate
As the tables above show, the same salary supports $40,000 less home in New Jersey than in Colorado because property taxes eat up more of your monthly budget. That’s the single biggest geographic variable in home affordability.
Interest rate
A 1% rate change has a large effect. On a $300,000 loan, going from 6.5% to 5.5% reduces the monthly payment by about $190. That change alone can increase the home price you qualify for by 8% to 10% at the same income level.
Other debt
A $500/month car payment reduces your affordable home price by roughly $60,000 to $70,000 at the same income level, because that payment comes out of your 36% DTI bucket.
How to Use the Affordability Calculator
The Home Affordability Calculator works backward from your income, down payment, debts, and rate to show the maximum home price you can afford. Enter:
- Your annual income (before taxes)
- Monthly debt payments (car, student, credit cards)
- Down payment amount or percentage
- Interest rate and loan term
- Property tax rate for your state
The calculator also accounts for PMI when your down payment is under 20%.
What This Guide Does Not Include
- VA (U.S. Department of Veterans Affairs) loans — No down payment required, no PMI, but a funding fee applies
- USDA (U.S. Department of Agriculture) loans — Zero-down options for eligible rural areas
- FHA (Federal Housing Administration) loans — Allow 3.5% down but require MIP (mortgage insurance premium) for the life of the loan with under 10% down
- Gift funds and down payment assistance programs — Some states offer DPAs (down payment assistance programs) that reduce your upfront cash needed. See our PMI removal guide for how PMI affects monthly costs
Calculator Methodology
The affordability estimates use:
- interest rate: 6.5% fixed 30-year
- down payment: 10%
- insurance: $100/month
- PMI: 0.65% of loan amount annually (applied until 80% LTV (loan-to-value ratio))
- DTI limit: 28% for housing costs
- property tax: state rates from configured data applied to full home price
- no HOA (homeowners association), MIP (mortgage insurance premium), or other debt modeled
The standard amortization formula:
Payment = P * r(1 + r)^n / ((1 + r)^n − 1)Official and Supporting Sources
- CFPB (Consumer Financial Protection Bureau): How much home can you afford?
- CFPB: What is a Loan Estimate?
- Fannie Mae: Conventional loan DTI limits
- Freddie Mac: Homeownership eligibility guidelines
- Daily Calcs Mortgage Calculator — state property tax data
- Mortgage payment by state — how property tax changes your monthly cost
- Refinancing vs. extra payments: Which saves more on your mortgage?
Next Step
Use the Home Affordability Calculator to enter your actual salary, down payment, and location. Then see how different home prices, interest rates, and down payment amounts change your monthly payment with the Mortgage Calculator.
Frequently Asked Questions
At $80,000 per year with no significant debt, the 28% DTI rule limits housing costs to $1,867 per month, which supports a home price of roughly $225,000 to $260,000 depending on your state's property tax rate. In Colorado (0.55% tax rate), you can likely afford $265,000. In New Jersey (2.2% tax rate), the same salary supports about $225,000.
At $120,000 per year, the 28% rule gives you up to $2,800 per month for housing. That supports a home price of $350,000 to $400,000 in most states at 6.5% interest with 10% down. The full price range depends on your state's property tax rate, down payment size, and other debts.
At $150,000 per year, the 28% rule allows up to $3,500 per month for housing. That supports a home price of $450,000 to $520,000 in most states with 10% down at 6.5%. Higher property tax states like New Jersey or Illinois reduce that range by roughly $30,000 compared to lower-tax states.
The 28/36 rule says your monthly housing costs should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%. Lenders still use variants of this rule in 2026 for conventional loan qualification. FHA loans allow up to 31% for housing and 43% for total debt.
A larger down payment reduces both your loan amount and may eliminate PMI (private mortgage insurance). Going from 5% down to 20% down on a $300,000 home lowers the monthly payment by roughly $200 to $400, including PMI savings. That can increase the home price you qualify for by $30,000 to $50,000.
Yes. Property taxes vary from 0.55% in Colorado to 2.2% in New Jersey. On a $350,000 home, that's a difference of $482 per month in property tax alone. Buyers in high-tax states qualify for less home at the same income, all else being equal. State income tax also matters — Texas and Florida have no state income tax, which effectively increases your take-home pay.
Related guides
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- Closing Costs Explained — What to Expect in 2026 How much closing costs really are in 2026. On a $300k home, expect $6k to $18k. See what each fee covers and how to reduce your total.
- FHA vs. Conventional Loan 2026 — Which Is Cheaper? Compare FHA vs conventional loans in 2026 with real dollar examples. See how MIP vs PMI, down payment, and rate affect your total monthly payment.
- FHA vs. Conventional vs. VA Loans 2026 — Which Is Best? Compare FHA, Conventional, and VA loans in 2026. See which loan type saves you the most in monthly payments and upfront cash based on your credit score.
- First-Time Homebuyer Programs 2026 — DPAs by State Down payment assistance programs in all 50 states. See grants up to $148k in California, zero-interest loans, and what you qualify for in 2026.