How much house can I afford on $85,000 a year?
$274,762 home price with 10% down
$346,780 interest over 30 years
Principal $247,286 Interest $346,780. 58¢ of every dollar paid goes to interest.
Home price whose payment ($1,983.33 a month including estimated property tax and PMI) is 28% of $85,000 gross income, with 10% down and a 30-year loan at 7.03%, the Freddie Mac average for the week of September 24, 2026.
That is a $247,286 mortgage and a $27,476 down payment.
Source: Freddie Mac Primary Mortgage Market Survey, week of September 24, 2026. An average, not an offer.
By down payment
| Down payment | Home price | Cash down | Loan | Principal and interest | PMI |
|---|---|---|---|---|---|
| 3% | $256,601 | $7,698 | $248,903 | $1,660.98 | $155.56 |
| 5% | $261,540 | $13,077 | $248,463 | $1,658.04 | $155.29 |
| 10% | $274,762 | $27,476 | $247,286 | $1,650.18 | $154.55 |
| 20% | $331,188 | $66,238 | $264,950 | $1,768.06 | — |
28% and 36% of income
| Gross monthly income | $7,083.33 |
|---|---|
| 28% for housing | $1,983.33 |
| 36% for all debts, minus $0 other debts | $2,550.00 |
| Housing budget used (the lower) | $1,983.33 |
Stretching to the 36% line with no other debts would allow about $353,266. Property tax is 0.78% a year (Estimate: the median of the 32 state rates we have sourced); insurance is not included because no sourced average exists for this selection.
If rates move
| 30-year rate | Home price | Loan | Change |
|---|---|---|---|
| 6.03% | $299,334 | $269,400 | +$24,572 |
| 6.53% | $286,655 | $257,990 | +$11,893 |
| 7.03% this week's average | $274,762 | $247,286 | $0 |
| 7.53% | $263,603 | $237,243 | −$11,159 |
| 8.03% | $253,131 | $227,818 | −$21,631 |
Questions
How much house can I afford on $85,000 a year?
About $274,762 with 10% down at this week's 7.03% average, if the full payment stays at 28% of gross income ($1,983.33 a month). With 20% down, about $331,188.
What mortgage can I get with a $85,000 salary?
A $247,286 loan at 10% down under the 28% guideline. Lenders also check total debts: at 36% of income, all debt payments together should stay under $2,550.00 a month.
How much house can I afford on $85,000 with no down payment savings?
With 3% down, about $256,601. The smaller down payment adds PMI (estimated at 0.75% of the loan a year) until the balance reaches 78% of the price.
How does the rate change what I can afford?
Each point matters: at 6.03% the same budget buys about $299,334, and at 8.03% about $253,131.
Would a 15-year mortgage change the answer?
Yes. At the 6.42% 15-year average, the same payment supports about $220,054 because more of each payment goes to principal.
Sources
- 30-year fixed mortgage average: 7.03%. Freddie Mac Primary Mortgage Market Survey (PMMS), series MORTGAGE30US, as of September 24, 2026; retrieved September 26, 2026.
- 15-year fixed mortgage average: 6.42%. Freddie Mac Primary Mortgage Market Survey (PMMS), series MORTGAGE15US, as of September 24, 2026; retrieved September 26, 2026.
- Property tax (median effective rate by state). Tax Foundation, effective property tax rate on owner-occupied housing (Census ACS), Property Taxes by State, 2026 edition (2024 data). States not yet sourced use 0.78%, the median of the 32 state rates we have sourced, marked as an estimate.
- Homeowners insurance (average premium). NAIC homeowners report, 2022 data, HO-3 policies. Only states with a sourced figure include insurance.
- PMI assumption: 0.75% of the loan a year below 20% down. Typical range 0.5–1.5% (Urban Institute, Freddie Mac); ends at 78% of the original value under the Homeowners Protection Act (CFPB).
- 28/36 debt-to-income guideline. Lender guideline (Chase, Bankrate); CFPB debt-to-income guidance.
Numbers on this page last changed September 26, 2026. How they are calculated: methodology.