On a $150,000 household income, lenders will support roughly $750,000 to $805,000 of house in the Boston suburbs. The town you choose decides where in that range you end up. That example assumes a $500 car payment, 20 percent down and a 45 percent debt-to-income ceiling. Arlington’s lower property tax lets that income buy about $804,000. Acton’s higher rate holds the same income to about $748,000.
You’ve probably tried an online affordability calculator already. You switched the town from Arlington to Acton and the answer barely moved, because most of those calculators guess your property tax with one national rate. In Greater Boston, that guess throws the answer off.
Three things turn an income into a realistic price. The lender’s rulebook caps your monthly debts as a share of gross income. The whole housing payment has to fit under that cap, taxes and insurance included. And each town takes its own cut in property tax before a dollar goes to the loan. Below, we work all three through one household across five towns, so you can redo them with your own numbers.
How Do Lenders Decide How Much I Can Afford?
Lenders don’t start with a price. They start with your gross monthly income, before taxes, and a ceiling on how much of it can go to debt payments each month. That ceiling is your debt-to-income ratio. Your future housing payment and every other monthly debt on your credit report, like a car loan or student loans, count against the same limit.
The limit depends on whose rulebook the loan is written under. Fannie Mae’s Selling Guide caps total debt-to-income at 36 percent on a manually underwritten loan, and lets it go up to 45 percent when the borrower meets its credit score and reserve requirements. A loan run through Fannie’s automated system, Desktop Underwriter, can go up to 50 percent. FHA uses two numbers. FHA’s underwriting handbook starts manually underwritten loans at 31 percent for housing and 43 percent for total debt, rising to 40 and 50 percent with two compensating factors, such as documented cash reserves.
You’ll often read about the 28/36 rule. It’s a rule of thumb. Fannie’s guide sets one total ceiling and doesn’t print a separate 28 percent housing limit. Any lender’s ceiling is also the most you can borrow. The payment you’d choose for yourself is usually lower, and our page on affording a home without feeling house-poor walks through finding it. For this page, ask whoever pre-qualifies you one question. Which guideline did you run my numbers under, and what does my price look like at the next one down?
What Does the Monthly Payment Have to Cover?
The payment that has to fit under the ceiling is the full one. Fannie’s guide counts principal, interest, property taxes, homeowners insurance and any association dues, plus mortgage insurance when you put less than 20 percent down. Principal and interest are the only pieces that buy house. Everything else comes off the top.
Property tax changes the most from town to town. Massachusetts towns set their own rates, in dollars per $1,000 of assessed value, and the state Division of Local Services’ FY2026 table shows how far apart five nearby towns are. Acton’s residential rate is $16.23. Andover’s is $12.31, Belmont’s $11.51, Beverly’s $10.81 and Arlington’s $10.67. On an $800,000 house, that’s about $1,082 a month in Acton against about $711 in Arlington.
Towns charge that tax on assessed value, not on what you pay. The examples below assume the two are close. When a house sells well above its assessment, the bill can rise at the next revaluation, so ask your loan officer which figure went into your numbers, the seller’s current bill or an estimate from your price.
How Much Can a $150,000 Household Spend on Housing?
One example household runs through everything below. It earns $150,000 a year together, which is $12,500 a month before taxes, and has one $500 car payment. It has saved 20 percent for the down payment. For the rate, we used Freddie Mac’s national weekly average of 6.95 percent for a 30-year fixed loan, from September 17, 2026. That’s a survey average, it isn’t a rate anyone is offering you, and it moves every week. Insurance is our own assumption of $150 a month, so swap in a real quote when you have one.
To turn a ceiling into a payment, multiply the monthly income by the ratio and subtract the other debts. At 36 percent, $12,500 times 0.36 is $4,500, and the car payment leaves $4,000 a month for housing. At 45 percent the same steps leave $5,125. At 50 percent it leaves $5,750.
All three payments are all-in numbers. Each one covers tax and insurance before any of it pays the loan, which is why the same $5,125 turns into a different price in every town. If your debts change between now and the day you apply, redo this step first, because everything after it depends on it.
Why Does the Same Income Buy Less House in Acton?
Hold everything steady at the 45 percent ceiling. Same income, same car payment, same 20 percent down, same rate and the same insurance. The only thing that changes is the town, and it moves the price by more than most buyers expect.
In Arlington, $5,125 a month supports a price of about $804,000. That’s a $643,500 loan, about $4,260 a month of principal and interest, about $715 of property tax and $150 of insurance. In Acton, the same $5,125 supports about $748,000. The tax takes about $1,012 a month there, so the loan shrinks to about $598,700 and its principal and interest to about $3,963. Acton’s bill runs about $297 a month higher, and on this income that costs about $56,000 of purchase price.
The other three towns fall in between. The example household’s $5,125 buys roughly these prices, lowest tax rate first, with each town’s closing-cost calculator if you want to check cash to close there:
- Arlington, $10.67 rate: about $804,000. Arlington closing costs
- Beverly, $10.81 rate: about $803,000. Beverly closing costs
- Belmont, $11.51 rate: about $795,000. Belmont closing costs
- Andover, $12.31 rate: about $787,000. Andover closing costs
- Acton, $16.23 rate: about $748,000. Acton closing costs
Our math produced these prices from the example. You won’t find them on a listing, but they make a good shortlist test. Take the two or three towns you’d buy in tomorrow and ask for your price in each one, instead of one number for the whole area.
What Moves Your Number the Most?
Once you think in monthly payments, you can price almost any change in your finances. At these inputs, every $100 a month of payment room is worth about $16,200 of price in Arlington and about $15,000 in Acton. The conversion works in both directions.
Debts move it fastest. Paying off a $400 car payment before you apply frees $400 of the same ceiling, which is worth about $64,700 of price in Arlington and about $60,200 in Acton. A new car loan taken out while you shop does the reverse. If you can clear a small balance before a lender reviews your file, run your numbers both ways first.
Rate moves it next. In Arlington at the 45 percent ceiling, the example household buys about $840,000 at 6.45 percent, $804,000 at 6.95 percent and $771,000 at 7.45 percent. That’s roughly $35,000 of price per half point. Nobody can tell you where rates will be the week you buy, so ask for your town list at two or three rates instead of one.
The down payment matters more than it looks. With 10 percent down instead of 20, the loan gets bigger and mortgage insurance joins the payment. Freddie Mac puts private mortgage insurance at $30 to $70 a month for every $100,000 borrowed. At $50, the middle of that range, the example household’s price drops to about $682,000 in Arlington and about $641,000 in Acton. That’s the trade for keeping more cash in the bank, and the Massachusetts closing costs calculator shows what you’d need at the table either way.
What Income Does Each Town’s Median Home Take?
Working backward from a price answers a different question. Instead of what your income buys, it shows what income a typical sale in each town needs. The table uses the same example inputs, 20 percent down and $500 of other monthly debt, at the 45 and 36 percent ceilings.
| Town | Median sale price | Income needed at 45% | Income needed at 36% |
|---|---|---|---|
| Beverly | $721,000 | about $136,000 | about $171,000 |
| Acton | $935,000 | about $183,000 | about $229,000 |
| Arlington | $1,100,000 | about $199,000 | about $248,000 |
| Andover | $1,085,000 | about $200,000 | about $250,000 |
| Belmont | $1,414,791 | about $253,000 | about $317,000 |
Medians cover different windows and home types, so compare them loosely. Beverly covers the 12 months to September 2026 (Redfin). Acton and Arlington cover the three months ending June 2026, all home types (Redfin). Andover covers the first quarter of 2026, single-family only (Realty ONE Group NEST). Belmont covers July 2026, all home types (Redfin). Incomes are our math, rounded.
Two results stand out. Andover’s median is $15,000 lower than Arlington’s, yet it takes slightly more income, because Andover’s tax rate is higher. And Belmont’s median, with 20 percent down, needs a loan of about $1,131,800. FHFA’s 2026 limit for Middlesex and Essex counties is $962,550, so that loan is a jumbo loan, and jumbo lenders set their own debt-to-income limits. Our page on 2026 conforming loan limits explains where that line falls.
The cash side matters too. Twenty percent of these medians runs from about $144,000 in Beverly to about $283,000 in Belmont, before closing costs. If those numbers rule out the house you pictured, our page on affording a starter home looks at the less expensive end of the same market.
What Should You Ask Before You Start Touring?
Get your number framed the right way before you fall for a house. Three questions do most of the work. Which guideline did you use, Fannie’s manual limits, its automated system or FHA? Which property tax figure did you use, the seller’s bill or an estimate from the price? And what’s my price in each town I’m considering? You can run your own versions first on our mortgage calculators and bring them along.
A first conversation with GoldCoast runs the same way. GoldCoast is an independent mortgage broker with one office in Beverly. We’ll pre-qualify you on your real income and debts, show you the price your numbers support in each town on your list, and then shop your file across wholesale lenders. The lender underwrites the loan and prices it. Our job is to make sure you know which rulebook the lender is measuring you against before it matters.
Common Questions About Affording a Home Around Boston
Is the 28/36 Rule What Lenders Use?
No. The 28/36 rule is a rule of thumb. Fannie Mae’s guide sets a total debt-to-income ceiling of 36 percent on a manually underwritten loan, up to 45 percent with strong credit and reserves, and up to 50 percent through Desktop Underwriter. FHA’s manual table starts at 31 and 43 percent.
Do Lenders Use My Gross Income or My Take-Home Pay?
Gross. The ratios run on income before taxes and deductions. A lender’s ceiling usually feels higher than a budget built from your paycheck for exactly that reason.
Is Property Tax Based on the Purchase Price or the Assessed Value?
The assessed value. Many estimates use the price times the town’s rate, which works when the two are close. If a house sells well above its assessment, expect the bill to rise at the next revaluation.
How Much Does a Car Payment Change What I Can Afford?
A lot. In our example, each $100 a month of other debt costs about $15,000 to $16,000 of purchase price, so a $400 car payment costs about $60,000 to $65,000.
What Happens If My Price Needs a Jumbo Loan?
In Essex and Middlesex counties, a loan above $962,550 in 2026 is a jumbo loan. Jumbo lenders set their own debt-to-income and reserve rules, so your ceiling can change even when your income doesn’t. Ask early if your target price crosses the line.