How much house can I afford on an $80,000 salary? The classic 28% rule allows about $1,867 a month for housing: mortgage, property tax and insurance. With a 30-year mortgage at 6.5%, that supports a loan of roughly $224,000, or a home price around $249,000 with 10% down.
Step 1: the 28/36 rule
- 28% of gross monthly income for housing: $6,667 × 0.28 = $1,867.
- 36% for all debts, including car loans and student loans: $2,400.
Step 2: from monthly budget to home price
Assuming about $450 a month for property tax and homeowner’s insurance, $1,417 is left for principal and interest. At 6.5% over 30 years:
| Down payment | Loan amount | Approximate home price |
|---|---|---|
| 10% | $224,000 | $249,000 |
| 20% (no PMI) | $224,000 | $280,000 |
These are estimates. Rates, taxes and insurance vary widely by location; with less than 20% down, private mortgage insurance adds to the monthly cost.
Step 3: check it against your real paycheck
Lenders look at gross income, but you pay the mortgage from take-home pay. In Texas, $80,000 leaves about $5,426 a month, so a $1,867 housing payment would take 34% of it. In a state with income tax, the share is higher.
Ways to afford more
- Pay down other debts to stay within the 36% limit.
- Improve your credit score for a lower rate.
- Look at first-time buyer programs in your state.
How the interest rate changes your budget
The same $1,417 monthly principal and interest payment supports very different loan sizes depending on the rate:
| Mortgage rate (30 years) | Approximate loan amount |
|---|---|
| 5.5% | $250,000 |
| 6.5% | $224,000 |
| 7.5% | $203,000 |
Upfront costs
- Down payment: 3% to 20% of the price, depending on the loan type.
- Closing costs: typically 2% to 5% of the loan amount.
- Emergency fund: keep several months of expenses after closing for repairs and surprises.
Loan types to know
- Conventional loans require private mortgage insurance below 20% down.
- FHA loans allow smaller down payments with mortgage insurance premiums.
- VA and USDA loans can offer no down payment for eligible buyers.
Renting vs buying on $80k
Buying builds equity but comes with maintenance, property taxes and less flexibility. If you might move within a few years, renting is often cheaper once closing and selling costs are included.
See your exact monthly take-home pay on $80,000 after tax in Texas or any state with the paycheck calculator.
How much house can I afford? A worked example on $80k
Here is the full answer to how much house can I afford for a single buyer in Texas earning $80,000. Gross monthly income is $6,667. The 28% limit gives $1,867 for housing and the 36% limit gives $2,400 for all debts, so car and student loan payments should stay under about $533 a month. After $450 for property tax and insurance, $1,417 is left for principal and interest, which supports a loan of about $224,000 at 6.5%.
With 10% down, the home price is about $249,000 and the down payment about $25,000. Closing costs of 2% to 5% of the loan add roughly $4,500 to $11,200. On the take-home side, about $5,426 a month in Texas minus $1,867 for housing leaves around $3,559 for everything else.
Common mistakes when setting a budget
- Taking the lender’s maximum as a target: approval is based on gross income, not on what you actually keep.
- Forgetting property tax and insurance: they can change the answer to how much house can I afford by tens of thousands of dollars.
- Emptying savings for the down payment: keep an emergency fund for repairs after you move in.
- Ignoring PMI: with less than 20% down, mortgage insurance raises the monthly cost.
Checklist before you make an offer
Use these steps to turn the question “how much house can I afford?” into a price you are comfortable with:
- Calculate 28% and 36% of your gross monthly income.
- Get local estimates for property tax and homeowner’s insurance.
- Compare the housing payment with your real take-home pay.
- Get a preapproval and compare offers from several lenders.
The Consumer Financial Protection Bureau has free tools and guides on loan options, closing costs and comparing offers on its Buying a House page. A HUD-approved housing counselor can also review your own answer to how much house can I afford before you commit.
Frequently asked questions
What is the 28/36 rule?
Housing costs should stay under 28% of gross monthly income, and all debt payments under 36%.
How much mortgage can I get on $80k?
About $224,000 at a 6.5% rate over 30 years, if property tax and insurance cost about $450 a month and you have no other large debts.
Does my state affect how much house I can afford?
Yes. Lenders use gross income, but your real budget depends on take-home pay and local property taxes.
Estimates for information only, not tax advice.
