How Much House Can You Afford?

One of the biggest questions homebuyers ask is: “How much house can I really afford?”The answer isn’t just about what a bank will approve—it’s about what fits your real life and long-term comfort.

1️⃣ Start With Your Monthly Comfort Zone

Lenders may approve you for a higher amount than you should actually spend.

General guideline:

• Housing costs should be around 25–30% of your gross monthly income

Housing costs include:

• Mortgage payment

• Property taxes

• Insurance

• HOA fees (if any)

2️⃣ Understand the 28/36 Rule

This is a common lending standard:

• 28% rule: Housing expenses ≤ 28% of gross income

• 36% rule: Total debts (housing + loans + credit cards) ≤ 36%

If you’re already close to these limits, stretching your budget can create stress later.

3️⃣ Factor in Your Down Payment

Your down payment affects:

• Monthly payment

• Loan amount

• Interest costs

Bigger down payment = lower monthly payment, but you should still keep emergency savings intact.

4️⃣ Don’t Forget the “Hidden” Costs

Many buyers focus only on the mortgage and forget ongoing expenses:

• Utilities

• Maintenance & repairs

• Property taxes increases

• Insurance adjustments

💡 A good rule: set aside 1–2% of the home’s value per year for maintenance.

5️⃣ Lifestyle Matters More Than Approval

Ask yourself:

• Do you travel often?

• Are you planning kids or schooling changes?

• Do you want room for savings and investments?

A home should support your lifestyle—not limit it.

6️⃣ Use Pre-Approval as a Guide, Not a Target

Pre-approval gives you a ceiling, not a goal.

Many financially comfortable homeowners buy below their maximum approval to:

• Reduce stress

• Increase flexibility

• Build long-term wealth

7️⃣ A Simple Example

If your gross monthly income is ₱100,000 (or $5,000):

• Comfortable housing budget: ₱25,000–₱30,000 per month

• This helps determine a realistic home price range

🏡 Final Takeaway

You can afford a house when:

• Your payments feel manageable

• You can still save and enjoy life

• Unexpected expenses won’t derail your finances

The best home is one that fits your budget today and your plans tomorrow.