Quick answer
On a $75,000 salary you can typically afford a home around $270,000–$300,000. The 28% rule caps total housing costs at about $1,750 per month, which at a 6.5% rate with 10% down buys a home in that range — less if you carry other debt.
If you earn $75,000 a year, you're right around the US median household income — and you're probably wondering what kind of home you can realistically afford. The answer depends on your debt, down payment, location, and current mortgage rates.
The 28/36 Rule
Most lenders use the 28/36 rule to determine how much you can borrow:
- 28% rule: Your total housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income
- 36% rule: Your total debt payments (housing + car + student loans + credit cards) should not exceed 36% of your gross monthly income
On a $75,000 salary, your gross monthly income is $6,250.
- Max housing payment (28%): $1,750/month
- Max total debt (36%): $2,250/month
What Does $1,750/Month Buy You?
At a 6.5% mortgage rate with 10% down on a 30-year loan, a $1,750 monthly payment (including taxes and insurance) translates to a home price of approximately $270,000–$300,000, depending on your state's property tax rate and insurance costs.
With 20% down (eliminating PMI), you might stretch to $310,000–$330,000.
The Impact of Existing Debt
The 36% rule is where many buyers get tripped up. If you have $500/month in existing debt payments (car loan + student loans), your available housing budget drops:
- Max total debt: $2,250/month
- Minus existing debt: -$500/month
- Available for housing: $1,750/month (same in this case)
But if your existing debts are $800/month, your housing budget drops to $1,450/month — reducing your affordable home price by $40,000–$60,000. Consider using our Debt Payoff Calculator to eliminate debt before buying.
Location Matters — A Lot
A $300,000 home looks very different across the US:
- Midwest (Ohio, Indiana, Missouri): 3-bed, 2-bath single family home with a yard
- South (Texas, Tennessee, Georgia): Newer 3-bed home in suburban communities
- West Coast (California, Washington): May only buy a small condo or nothing at all
- Northeast (New York, Massachusetts): Varies wildly — affordable in rural areas, impossible in cities
Down Payment Strategies
- 20% down ($60,000 on $300K): Best rate, no PMI, lowest monthly payment
- 10% down ($30,000): PMI adds ~$100–$200/month but gets you in sooner
- 3.5% down (FHA loan): Only $10,500 down, but higher PMI and insurance costs
- 0% down (VA loan): Available to veterans — best deal in the market
The Smart Approach
Just because you can borrow $300,000 doesn't mean you should. Many financial experts recommend keeping housing costs at 25% of take-home pay (not gross), which gives you more breathing room for savings, emergencies, and enjoying life.
Use our Rent vs Buy Calculator to compare the total costs of buying at different price points. And check your Financial Health Score to make sure you're financially ready for homeownership.
Frequently Asked Questions
What is the 28/36 rule?
Lenders prefer that housing costs (mortgage, property tax and insurance) stay under 28% of gross monthly income, and that all debt payments combined stay under 36%.
How does existing debt affect how much house I can afford?
On $75,000, the 36% rule allows about $2,250 per month in total debt. If you already pay $500 per month for a car and student loans, only $1,750 is left for housing.
How much down payment do I need on a $300,000 house?
It ranges from $0 (VA or USDA loans) to $10,500 (3.5% FHA) to $60,000 (20% conventional). Putting down less than 20% on a conventional loan adds PMI.
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Disclaimer: This article is for educational purposes only and is not financial, tax, or legal advice. Figures are estimates based on publicly available data at the time of writing. Consult a qualified professional about your situation.