How much house can you afford in Greater Boston?

Every week someone tells us a bank pre-approved them for a number that made their stomach drop. That reaction is healthy. A pre-approval tells you the most a lender will allow under its guidelines. It does not know about daycare, student loans on income-driven repayment, or the fact that you would like to take a vacation some years. In Greater Boston, where a modest condo can cost more than a large house elsewhere, the gap between approved and comfortable matters a lot.

Start with the monthly payment, not the price

A home price is abstract. A monthly payment is something you can hold up against your current rent and your bank account. Your full payment includes four parts: principal, interest, property taxes and homeowners insurance, often called PITI. For condos, add the association fee. With less than 20% down on a conventional loan, add private mortgage insurance.

Property taxes vary widely around Boston. For fiscal year 2026, Boston's residential rate is about $11 per $1,000 of assessed value with a residential exemption for owner-occupants, while some suburbs charge more than $15 per $1,000. On a $750,000 home, that difference can be over $150 a month, so the town you choose changes what you can afford.

The ratios lenders use

Lenders look at your debt-to-income ratio, or DTI: total monthly debt payments divided by gross monthly income. Most conventional loans allow up to 45%, and some approvals go to 50%. FHA can go higher. But a limit is not a target.

• Housing ratio: your new housing payment divided by gross income. We suggest staying near 28% to 31% if you can.
• Total ratio: housing plus car loans, student loans, credit card minimums and other debts. Staying under 40% leaves real breathing room.
• Cash reserves: aim to keep at least three months of full expenses in savings after closing, separate from your down payment.

Here is an example. A household earning $165,000 a year has gross monthly income of $13,750. A 30% housing ratio suggests a payment near $4,125. With $120,000 down, a 6.125% sample rate, Boston-area taxes and insurance, that supports a purchase price around $640,000 to $680,000, while the maximum approval might be closer to $800,000.

Cash to close is its own budget

Your down payment is only part of the cash you need. Massachusetts closings include attorney fees, title insurance, recording fees, prepaid property taxes and insurance, and an initial escrow deposit. Plan for 2% to 4% of the purchase price on top of the down payment. Seller credits, lender credits and first-time buyer assistance programs can lower this, and we show every option on one page.

The right price is the one where an unexpected $2,000 car repair is an annoyance, not a crisis.

Costs first-time buyers forget

• Condo special assessments for roof, elevator or masonry projects in older Boston buildings.
• Heating costs for older single-families, which can run $300 to $500 a month in winter.
• Moving, window treatments, basic furniture and the small repairs every house needs in year one.
• Flood insurance in parts of the South Shore and East Boston.

How to find your number

Start with our affordability calculator using your real income and debts, then lower the result until the monthly payment feels similar to what you save plus pay in rent today. Next, talk to a loan officer about programs. A different loan type, a small buydown or an assistance program can shift the comfortable price by tens of thousands of dollars.

Finally, get pre-approved at the comfortable number, not the maximum. We can issue letters at any amount up to your approval, so your agent can make offers without revealing your ceiling. That keeps your negotiating position strong and your monthly budget intact.

About Lena Park

Lena works with biotech and university families in Cambridge and Somerville, and knows how to document equity compensation cleanly.

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This article is for general education and is not financial, tax or legal advice. Figures are examples for illustration only.