Determining how much of your income should go to your mortgage should start with your budget and long-term financial plan, but there are also some industry formulas you can use to help.
One of the simplest is a rule of thumb to borrow a maximum of two to three times your household income to buy a home. According to the Census Bureau, the median household income in the U.S. was just over $80,600 in 2023. If you earn the median income, this rule suggests you borrow between $161,200 and $241,800 for a home. (Keep in mind this is the amount you borrow — after making a down payment. It’s not necessarily the price of the house.)
Other rules are slightly more complicated but can also help home buyers and lenders determine an appropriate budget.
Michele Lerner | Yahoo Finance