The Real Math Behind Buying in San Francisco
If you're weighing whether to buy, this is probably the question keeping you up at night: how much house can I actually afford? I wish there were one clean number I could hand you, but the honest answer depends on your income, your debt, your credit, your down payment — and, especially here, where you're buying.
A good starting point is what's known as the 28/36 rule. The idea: keep your housing costs — mortgage, property taxes, insurance, HOA dues if you've got them — at or under 28% of your gross monthly income. And keep your total monthly debt, housing included, under 36%.
Is this gospel? No. Plenty of lenders will work with you above those numbers, especially if your credit is strong or your down payment is solid. Think of 28/36 as a sanity check, not a ceiling.
Income and debt get the headlines, but they're not the whole story.
Your down payment. A bigger down payment does more than just shrink your loan — it can mean skipping PMI (private mortgage insurance) if you're at 20% or above, it can unlock a better interest rate from your lender, and it tends to make your offer more attractive to a seller who wants a deal that won't fall apart over financing. I've seen this tip the scales in competitive situations more than once.
Interest rates. Even a small shift in rates changes what you can afford. When rates climb, it may push you toward a lower price point, or make it worth waiting and watching. Keep an eye on where rates are heading before you lock in your search range.
Loan type. FHA, VA, and USDA loans each come with their own down payment rules and terms — FHA, for instance, allows a lower down payment but requires PMI. Your lender can walk you through how your loan type shapes your buying power.
Credit score. A stronger score usually means a better rate, which means lower monthly costs, which means more home within reach. If your score needs work, that's often the highest-leverage thing you can do before you start touring.
Your local market. This one's personal to me. In a market like ours, a $100K salary doesn't stretch the way it would somewhere with a lower cost of living — property taxes, insurance, and everyday costs here all factor into what you can realistically carry each month. Same income, very different budget, depending on the zip code.
Just because a lender says you qualify for a certain number doesn't mean you should spend it. Stretching to the top of your approval can leave you house poor: tight on savings, emergencies, and the occasional vacation. Some buyers are fine with that trade-off. Many aren't. Be honest with yourself about the lifestyle you want to keep living once you're in the home.
A solid home affordability calculator will estimate your range based on income, down payment, credit, and debt — and let you test scenarios, like what a stronger credit score or bigger down payment does to your budget.
Don't forget to build in the full cost of ownership, not just the mortgage:
Using the 28/36 rule on a $100,000 annual salary:
With good credit, manageable debt, and a reasonable down payment, that could put you in a $300,000–$450,000 home price range, though your real number will move up or down depending on rates, taxes, and how much you're putting down.
How much house you can afford comes down to your income, your debt, your lifestyle, and the market you're buying into. Pair up-to-date guidelines and a good calculator with advice from a real estate agent who knows the local terrain — and a lender you trust — and you'll land on the number that's actually right for you, right now.
Curious what's actually happening in the market right now? Take a look at what's driving San Francisco's current momentum — condos, competition, and all.
Navigating the SF market takes more than a calculator — it takes someone who knows the neighborhoods, the inventory, and what lenders here are actually approving. If you're weighing a move, I'd love to help you figure out what's realistic and what's possible. Reach out anytime.
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