How much house can I afford?

How much house you can afford comes down to your income, debt-to-income ratio, credit score, and mortgage rate. A common guideline is the 28/36 rule: spend no more than 28% of your gross monthly income on housing, and keep total debt payments under 36%. On a $654,000 annual income (about $54,500 a month), that caps your mortgage payment at roughly $15,260. With a standard 30-year mortgage at a 3.5% rate, a payment like that supports a loan of about $3,398,325. Remember that property taxes, insurance, utilities, maintenance, and the size of your down payment all affect what you can comfortably afford.