A common rule of thumb says you can afford a home priced at roughly three to five times your annual gross income. On a $100,000 salary, that puts you somewhere between $300,000 and $500,000. But that range alone does not tell you much -- what you can technically qualify for and what you can comfortably carry are often two different numbers, and the gap between them matters.

Here is how to think through it more carefully.

What Do Lenders Use to Determine How Much You Can Borrow?

Lenders do not just look at your salary. They look at your full financial picture, with the most important factor being your debt-to-income ratio (DTI).

Your DTI compares your total monthly debt payments to your gross monthly income. Most conventional lenders prefer a total DTI of 43 percent or lower, though some loan programs allow higher. Front-end DTI -- just the housing payment (principal, interest, taxes, insurance, and any HOA dues) divided by your gross income -- should ideally stay at or below 28 percent.

In practice, this means a buyer earning $8,000 per month in gross income should generally keep total housing costs at or below $2,240 per month. If that buyer also has a car payment of $400 and student loans of $300, those $700 in existing debts reduce how much mortgage the lender is willing to add on top.

Your credit score also plays a significant role. Higher scores qualify you for better interest rates, which directly affects your monthly payment and how much home you can finance at a comfortable payment level. A difference of half a percentage point on a $450,000 mortgage can mean more than $100 per month.

What Is the Difference Between What You Qualify For and What You Can Afford?

This is one of the most important distinctions in home buying, and it gets glossed over constantly.

Lenders approve you based on your income, debts, and credit. They are not accounting for your other financial priorities -- your retirement contributions, your emergency fund, your kids' activities, your travel, your lifestyle. They are calculating the maximum they are willing to lend, not the amount that will let you sleep well at night.

A good benchmark many financial planners use is keeping total housing costs at or below 25 to 28 percent of your take-home pay (after taxes), not your gross income. That is a more conservative measure than what lenders use, but it tends to produce a payment that leaves room for everything else in your budget.

How Does Your Down Payment Affect What You Can Buy?

Significantly. A larger down payment reduces the loan amount, which reduces your monthly payment and your interest costs over time. It can also eliminate or reduce private mortgage insurance (PMI), which lenders typically require when your down payment is less than 20 percent of the purchase price.

PMI usually runs between 0.5 and 1.5 percent of the loan amount annually, paid monthly. On a $400,000 loan, that is $2,000 to $6,000 per year added to your housing cost -- a meaningful number that affects what you can comfortably carry.

For buyers with less than 20 percent down, FHA loans (which require 3.5 percent down with qualifying credit) and conventional loans with 3 to 5 percent down are both options. The tradeoff is a higher monthly payment and the addition of mortgage insurance until you build enough equity to remove it.

What Costs Beyond the Mortgage Payment Do You Need to Account For?

Your mortgage payment is not your total housing cost. Several additional expenses need to factor into your budget:

Property taxes vary significantly by location and can add several hundred to several thousand dollars per month depending on where you buy. In Northern Virginia, property tax rates vary by jurisdiction. Fairfax County's FY2026 rate is approximately 1.12 percent, Arlington County's is about 1.01 percent, and Loudoun County's is lower at around 0.81 percent. On a $700,000 home in Fairfax, that translates to roughly $650 per month in property taxes added to your payment -- a meaningful number that affects your overall affordability.

Homeowner's insurance typically runs $100 to $200 per month in this region for a standard single-family home, though costs vary based on coverage, property type, and location.

HOA fees apply to many condos and townhomes and can range from under $100 to several hundred dollars per month. In some Northern Virginia communities, HOA fees are substantial enough to meaningfully affect your buying power.

Maintenance and repairs are costs that renters do not face but homeowners do. A reasonable estimate is one percent of the home's value per year, though older homes or those with deferred maintenance may run higher. Budgeting for this separately from your mortgage payment helps avoid being caught off guard when the HVAC goes out or the roof needs attention.

How Do Interest Rates Affect What You Can Afford?

More than most buyers expect. As rates change, the same monthly payment buys significantly more or less house.

At a 6 percent interest rate on a 30-year fixed mortgage, a $2,000 monthly principal and interest payment supports a loan of approximately $333,000. At 7 percent, that same $2,000 payment supports a loan of roughly $300,000. At 7.5 percent, it drops to around $285,000.

That is a spread of nearly $50,000 in purchase power from a single percentage point difference in rate -- which is why buyers who are close to their affordability ceiling pay close attention to rate movements, and why locking a rate at the right time matters.

What Does Affordability Look Like in Northern Virginia Specifically?

Northern Virginia carries higher home prices than most of the country. The median sale price across the Northern Virginia region covered by NVAR -- which includes Fairfax County, Arlington County, and the cities of Alexandria, Fairfax, and Falls Church -- was $750,000 in July 2026, according to NVAR market data. Loudoun County, reported separately by NVAR, had a median sold price of $813,000 that same month. Prince William County offers somewhat more accessible price points, though it has also seen significant appreciation.

For buyers in this market, reaching the median price requires either a substantial down payment, a strong household income, or both. At a 7 percent interest rate with 20 percent down on a $750,000 home, the principal and interest payment alone is approximately $4,000 per month -- before property taxes, insurance, and any HOA dues. That housing cost at the 28 percent front-end DTI threshold implies a gross household income of roughly $200,000 or more to qualify comfortably. Buyers with strong incomes, larger down payments, or who are targeting Prince William County price points will find the math more manageable.

Working with a lender early -- before you start touring homes -- is important in this market. Knowing your actual pre-approved number, not just a rough estimate, lets you act quickly when the right home comes up.

FAQs

Should I buy as much house as I qualify for?
Not necessarily. Qualification is the ceiling the lender sets, not a recommendation. Most financial advisors suggest keeping your total housing payment at or below 25 to 28 percent of your take-home pay, which often lands below the maximum you qualify for. Buying at the top of your qualification leaves little room for other financial priorities or unexpected expenses.

What if I have a lot of student loan debt?
Student loans factor into your DTI calculation and can meaningfully reduce how much mortgage you qualify for. Some loan programs treat income-driven repayment (IDR) plans favorably, using the actual monthly payment rather than a calculated figure. Talk to a lender who is familiar with this -- the difference in how your loans are counted can affect your buying power by tens of thousands of dollars.

Does my salary alone determine what I can afford, or do bonuses and overtime count?
Lenders typically require at least a two-year history of bonus or overtime income to count it toward qualification. If you have been receiving consistent bonuses for at least two years and they are documented on your tax returns, a lender can factor them in. Irregular or one-time income generally does not count.

How much should I have saved before buying a home?
Beyond your down payment, plan to have three to six months of expenses in an emergency fund and enough to cover closing costs (typically 2 to 5 percent of the loan amount for buyers). Coming into the transaction without a cash cushion after closing leaves you exposed to any early repairs or financial changes.

What is the first step if I am not sure what I can afford?
Talk to a lender and get a pre-approval, not just a pre-qualification. Pre-approval involves actual income and credit verification and gives you a real number to work with. It also positions you to move quickly once you find the right home, which matters in a competitive market like Northern Virginia.