The 28% Rule Explained: How Much House Can You Really Afford?
You’re ready for a bigger home.
Maybe you need another bedroom. Maybe you want a larger yard, a different school zone, or more room for your family to enjoy life.
Then comes the big question:
“How much house can I comfortably afford?”
That question is especially important when you already own a home and plan to sell it before—or while—buying your next one.
A lender can tell you how much you may qualify to borrow. But that number is only one part of the picture.
You also need to decide what monthly payment fits the life you want after you move.
That’s where the 28% rule can be a helpful starting point.
What Is the 28% Rule?
The 28% rule is a common budgeting guideline that suggests keeping your monthly housing costs at about 28% or less of your gross monthly income.
Gross monthly income simply means the money you earn each month before taxes and other deductions are taken out.
Your housing costs may include:
Mortgage principal, which is the amount that pays down your loan
Mortgage interest
Property taxes
Homeowners insurance
Mortgage insurance, if needed
HOA dues, if your neighborhood has them
The important thing to remember is that the 28% rule is a budgeting guideline, not a guarantee of what you can borrow or what you should spend.
Your lender will look at your full financial picture when determining what you may qualify for.
Source note before publication: Add a reliable source confirming the commonly cited 28% budgeting guideline and its appropriate use.
What Does 28% Look Like?
Here’s a simple example.
If your household earns $7,000 per month before taxes, 28% would be $1,960.
Using the guideline, you might start by looking at a total monthly housing cost of around $1,960.
But that doesn’t mean $1,960 is automatically the right number for your family.
Your other expenses matter too.
Do you have childcare costs? Car payments? Travel plans? College savings? Activities for your kids? Do you want extra money each month for home projects or family fun?
A comfortable home budget should leave room for those things, too.
Qualifying for a Home and Affording It Aren’t the Same Thing
This is one of the most important things I want buyers to understand.
A lender may say:
“Here’s how much you qualify to borrow.”
Your next question should be:
“What payment will still let me enjoy my life?”
Think about the things you pay for each month:
Groceries
Childcare
Transportation
Medical expenses
Retirement savings
Vacations
Entertainment
Emergency savings
Your home is a big part of your life, but it isn’t your whole life.
The goal is to find a home you love and a payment that gives you room to enjoy it.
What About the 28/36 Rule?
You may also hear people talk about the 28/36 rule.
This is another budgeting guideline. It combines housing costs with your other monthly debt.
The commonly cited guideline suggests:
About 28% or less of gross monthly income toward housing
About 36% or less toward housing plus other monthly debt payments
Those other payments might include:
Car loans
Student loans
Credit card payments
Personal loans
Other recurring debts
This can give you a broader look at your budget.
But remember: these percentages are guidelines. They are not a substitute for talking with a qualified lender about your specific finances and loan options.
Source note before publication: Verify the 28/36 percentages with an authoritative financial or lending source and link to it here.
What Does the 28% Rule Mean for Move-Up Buyers?
If you already own a home and are planning to buy your next one, your situation can be a little different.
You aren’t simply buying a house.
You may be selling one home and buying another at the same time.
That means we need to look at the full picture.
For example:
How much could your current home sell for?
How much might you have left after paying off your current mortgage and selling costs?
How much of that money do you want to put toward your next home?
What monthly payment feels comfortable?
Do you need to sell before you buy?
How will the timing of both moves work?
This is why I encourage move-up buyers to make a plan before falling in love with the next house.
Your current home may play an important role in helping you reach the next stage of your life.
A Bigger Home Can Come With Bigger Expenses
Moving up often means more than a higher mortgage payment.
A bigger home may also mean:
Higher utility bills
More space to maintain
More landscaping
Higher insurance costs
HOA dues
More furniture
Future repairs or improvements
That doesn’t mean you shouldn’t buy the bigger home you’ve been dreaming about.
It simply means you want to understand the full cost before making the move.
The goal is to feel excited when you get the keys—not worried about the next bill.
Buying a Home in Augusta and the CSRA
Housing costs can look different depending on where you buy.
If you're considering:
Augusta
Evans
Grovetown
Martinez
Harlem
North Augusta
Other communities throughout the CSRA
look beyond the purchase price.
Property taxes, insurance, HOA dues, utilities, and home maintenance can all affect what you spend each month.
The home itself matters too.
For example, an older home may have different maintenance needs than a newer home. A neighborhood with shared amenities may also have HOA fees to include in your monthly budget.
That’s why I like to help buyers look at more than the price on the listing.
We want to find a home that fits your family, your goals, and the life you want to build there.
Don’t Forget the Cost of Owning the Home
Even when your mortgage payment feels comfortable, homeownership comes with other expenses.
Plan for things like:
Home maintenance
Appliance replacement
Landscaping
Utility bills
Emergency repairs
Home improvements
Leaving some breathing room in your budget can make those expenses much easier to handle.
And if you're moving from a smaller home into a larger one, think about what may change.
Will you have more rooms to heat and cool?
A larger yard to maintain?
New furniture to buy?
Those details can help you decide what monthly housing payment truly feels comfortable.
Start With Your Life, Not Just a Number
Imagine that you qualify to spend more than you originally planned.
It can be tempting to immediately move your home search into a higher price range.
Before doing that, think about what you want life to look like after closing day.
Maybe you want money left for family vacations.
Maybe you want to update the kitchen after moving in.
Maybe saving for college or retirement is important to you.
Or maybe having a larger emergency fund simply helps you sleep better at night.
Your budget should support those goals.
Buying below the maximum amount you qualify for can sometimes give you more freedom to enjoy your new home and the life you're building there.
Selling Your Current Home Changes the Conversation
For many move-up buyers, one of the biggest questions isn’t simply:
“How much can I afford?”
It’s:
“How do I sell this house and buy the next one without everything becoming stressful?”
That is where planning matters.
Before you start shopping, it can help to understand:
What your current home may be worth
What you may walk away with after the sale
What you want to spend on the next home
Whether selling or buying should happen first
How to make the timing work for your family
Once those pieces are clear, shopping for your next home can feel much less overwhelming.
Instead of guessing, you have a plan.
Frequently Asked Questions
What is the 28% rule?
The 28% rule is a budgeting guideline that suggests keeping your monthly housing expenses around 28% or less of your income before taxes and other deductions.
Is the 28% rule required to get a mortgage?
No. It is a budgeting guideline. Your lender will look at your finances and the requirements of your loan program to determine what you may qualify for.
What expenses should I consider?
Think about your mortgage principal and interest, property taxes, homeowners insurance, mortgage insurance if needed, and HOA dues if applicable.
You should also think about utilities, maintenance, repairs, and other costs of owning the home.
What is the 28/36 rule?
It is another budgeting guideline that looks at both housing expenses and other monthly debts. Before relying on these percentages, talk with a qualified lender about your specific situation.
What if I already own a home?
If you need to sell your current home to buy the next one, your existing home becomes an important part of your plan.
Understanding what your home may sell for, how much money you may receive from the sale, and when to list can help you build a clearer budget for your next home.
Meet Sherry Sanders
For Sherry Sanders, real estate isn't just about property. It's about finding where your family belongs.
As a former educator in both Richmond County and Columbia County, Sherry possesses firsthand knowledge of the local neighborhoods, lifestyles, and school zones that make the CSRA such an incredible place to live.
Backed by over two decades of local sales and leadership experience with Blanchard and Calhoun Real Estate Co., she helps buyers understand what they can comfortably afford, navigate the home-buying process with confidence, and find a home that fits both their lifestyle and long-term financial goals.
A proud grandmother and lifelong local, Sherry is dedicated to making you feel right at home.
Have more questions about buying a home in Augusta or the CSRA?
📞Call Sherry Sanders at 706-877-7005
