What can you actually afford? Based on your income, existing debt, and the lending ratios banks use — not a generic multiple of your salary.
Lenders typically use two ratios to qualify you. The front-end ratio (28%) limits your total housing payment — principal, interest, taxes, and insurance — to 28% of your gross monthly income. The back-end ratio (36%) limits all debt payments — housing plus car loans, student loans, credit cards, and any other installment debt — to 36% of gross income.
The binding constraint is whichever ratio gives you the lower maximum — that's the one lenders will actually cap you at. Your down payment determines your loan amount, which (combined with rate and term) determines the property price you can support under that payment cap.
FHA loans allow up to 43% back-end, and some conventional loans go to 45–50% with strong compensating factors. But just because you can qualify doesn't mean you should borrow the maximum. The 28/36 guidelines exist because exceeding them tends to lead to financial stress.
The 28/36 rule is the foundational guideline used by conventional mortgage lenders. The "28" means your total monthly housing cost (PITI — principal, interest, taxes, insurance) shouldn't exceed 28% of your gross monthly income. The "36" means all of your monthly debt obligations combined — housing plus all other installment and revolving debt — shouldn't exceed 36% of gross income. Your actual limit is whichever is more restrictive.
A larger down payment increases your buying power in two ways: it directly adds to the purchase price you can support (since you're borrowing less) and it may eliminate PMI, freeing up more of your payment capacity for principal and interest. Moving from 10% to 20% down on a $500,000 home saves roughly $200/month in PMI and reduces interest paid by tens of thousands over the loan term.
Your credit score is one of the biggest variables in home affordability — not because it changes the purchase price formula, but because it determines your interest rate. The difference between a 680 and a 760 credit score can be 0.5–1.0 percentage points on your rate. On a $400,000 loan, that's $130–270/month — which translates directly into how much house you can qualify for under the 28% payment cap.
Conventional loans typically cap at 43–45% back-end DTI. FHA loans allow up to 50% with strong compensating factors. VA loans don't have a hard DTI cap but lenders generally look for 41% or below. Jumbo loans are stricter — most require a maximum back-end DTI of 38–43%, even with excellent credit and a large down payment. Know your loan type before assuming the 36% guideline applies.