SUCCESS

The federal lawsuit was brought by the attorneys general of 29 U.S. states.

Atletico Madrid has instantly responded to comments made by FC Barcelona President Joan Laporta by saying there is “0% chance” of selling Julian Alvarez to the Catalans.

Key Takeaways
The first step in your homebuying journey is determining how much you can comfortably spend and setting your budget.

How much home you can afford will depend on many factors, including your income, debt-to-income ratio and the loan terms.
Using an affordability calculator gives you an estimate of your homebuying budget.
Updated June 2026

Buying a home can be an exciting journey. It’s one of the largest investments you’ll make, and it’s the key to building long-term wealth. Your first steps are to determine exactly how much house you can afford and to set a budget.
Many factors determine how much you can afford, including your credit score, the type of mortgage you choose, your down payment and your monthly income. Understanding how these factors determine what you can afford is essential, especially for first-time homebuyers. Use our mortgage calculator to get the information you need to start your homeownership journey on the right path.
In this guide, we’ll cover:

How much home can I afford?
How to calculate your home affordability
Factors affecting home affordability
Ways to improve your house affordability
FAQs about home affordability
Latest news on home affordability

How Much Home Can I Afford?
Purchasing property is a decision that will impact your finances for years to come. To avoid winding up with a home loan you can’t afford, calculate your monthly income and expenses carefully before you take the plunge.
How much house you can afford will largely depend on:

Your loan amount, mortgage rate and loan term

Your down payment

Your gross monthly income

Your annual income

Your total monthly debt or monthly expenses, including credit card debt, student loan payments, car payments, child support, alimony and other expenses

State property taxes, which are paid annually or biannually and vary by state

Current mortgage rates and closing costs, which vary by location

Homeowners association (HOA) and condo fees for the home you’re purchasing

Most homebuyers take out a conventional mortgage loan. These loans typically require a down payment of no less than 3% of the property value if they are a first-time buyer or 5% if they are a repeat buyer, a minimum credit score of 620, a debt-to-income ratio (DTI) of 36% and a monthly payment that doesn’t exceed 28% of the buyer’s pre-tax income. However, some lenders will accept a lower credit score and higher DTI.
Lenders will also consider a buyer’s ability to pay all the fees and upfront costs associated with buying a home, such as closing costs and insurance fees. Your down payment also plays a big role. If you can come to the table with a large down payment, it can increase your buying budget (because you need to borrow less and can therefore go further up in price). The interest rate you qualify for — which relies heavily on your credit score — also factors in.
Keep in mind that you may qualify for other loan types with fewer restrictions and additional benefits. Our best mortgage lenders page features reviews of lenders that may meet your needs.
How much house can I afford with an FHA loan?
Depending on your current financial situation and your credit score, a loan insured by the Federal Housing Administration — known as an FHA loan — can allow you to purchase a home with fewer restrictions than a regular mortgage.
FHA loans feature maximum qualifying ratios of 31/43 for most applicants with a credit score higher than 500. This means that no more than 31% of your income should go to housing costs, and 43% to total debt.
You may be allowed to have a ratio as high as 40/50 if you have compensating factors. These are financial factors that reduce your risk of default and can include things like a particularly flush savings account, significant additional income, a very large down payment or an especially high credit score. With automatic underwriting, those ratios can climb to 47/57. This higher ratio makes FHA loans ideal for those with lower incomes or shorter credit histories.
Borrowers with a credit score of 580 or higher can also pay as little as 3.5% down, lower than the typical 10% required for scores below this threshold.
You should also be aware of the maximum FHA loan amounts, which change every year. For a single-family home, the maximum limit varies by county, ranging from $541,287 in low-cost areas to $1,249,125 in high-cost areas. Here’s a look at the full scope of borrowing limits:

One unit
Two units

Three units

Four units

Maximum limit in low-cost areas:

$541,287

$693,050

$837,700

$1,041,125

Maximum limit in high-cost areas:

$1,249,125

$1,599,375

$1,933,200

$2,402,625

How much house can I afford with a VA loan?
While the maximum debt-to-income ratio is 41% under VA loan general guidelines, the VA backs loans for borrowers with higher ratios, provided they meet other qualification criteria. The VA doesn’t establish minimum credit score requirements, but lender do, so your score will affect the interest rate you’re offered. The biggest draw of a VA loan is that many borrowers can qualify for 0% down payment.
These loans are only available to active U.S. military members, veterans, reservists, members of the National Guard and surviving spouses. You’ll also need to meet certain days-of-service requirements to be eligible.
How much house can I afford with a USDA loan?
USDA loan terms for qualifying rural areas are more flexible than those for conventional loans. They don’t require a down payment and can include the mortgage insurance fee in the loan, which means you can finance up to 101% of the home’s value and avoid paying the fee upfront.
Keep in mind, however, that there are income-eligibility parameters (borrowers must earn no more than 115% of the area’s median household income) and parameters for the house’s price and size. Even if you can afford a certain amount, you may only qualify for a less expensive home.
To see these requirements in detail, visit the USDA website and look at the qualifying areas and income by county. Generally, only rural and some suburban areas will qualify.
How to calculate your home affordability
Before you start scrolling through real estate listings, come up with a price range of what you can afford. A home affordability calculator provides a ballpark figure based on either your debt-to-income ratio or your estimated budget.
Once you’ve plugged in all your info, you’ll get an estimated number for the maximum amount you can pay for a house, plus your estimated monthly mortgage payment.
1. Know the factors that affect home affordability
Mortgage rates
The interest rate you qualify for plays a big part in your budget. It affects both your monthly payments and the loan’s long-term costs.
Current mortgage rates will affect what rate you can get, but personal factors — like your credit score and down payment — will play even bigger roles. Generally speaking, the better your score and the more you put down, the lower your interest rate will be.
Affordability can also be influenced by whether you choose a fixed-rate or adjustable-rate mortgage, the length of your loan term and the type of mortgage product you use. VA and FHA loans, for instance, tend to have lower rates than conventional loans (because they have government backing that lowers lenders’ risk), although you will have to pay other fees, such as the VA funding fee and a mortgage insurance premium on FHA loans, that can increase your overall costs. Short-term loans also tend to have lower interest rates.
Credit scores
Your credit score is another important factor in determining how much house you can afford. Credit scores influence everything from your interest rate to your approval odds — maintaining a good score (typically 620 or higher) can lead to more favorable loan terms and make homeownership more achievable.
You can check your credit score through several online sources, such as Credit Karma. You can get a free copy of your full credit report through any of the three credit bureaus — Experian, Equifax or TransUnion, or you can check with your bank or credit card issuer. Many will offer free credit score monitoring as part of their client services.
Income
The amount of money your household brings in each month is one of the main things lenders look at when you apply for a mortgage. Your lender will also want to see consistent income to ensure you can reliably make your monthly payments.
Remember, though, that just because you can get a loan doesn’t mean you should, and it’s your responsibility to take a look at your entire financial picture (and whether paying for the house you’re interested in is doable with your budget) before signing on the dotted line.
Home value
Home value influences purchase price, down payment requirements, loan amounts, property taxes, insurance costs and ongoing maintenance expenses. Carefully consider the long-term costs of owning each potential property you’re eyeing.
Debt-to-income ratio
The debt-to-income ratio is a metric mortgage lenders use to determine whether you qualify for a mortgage and the size of the loan you can secure. Not only do mortgage lenders have maximum DTIs you’ll need to fall under to qualify, but your DTI can also impact how much you’re able to borrow and the rate you get, too. Lower DTIs will likely get you more favorable terms.
Use this DTI calculator to understand what numbers you’re working with. If your DTI is too high to qualify, consider paying down debts or taking on extra hours or freelance work. You can increase your income while lowering your DTI.
Property taxes and insurance
Property taxes and homeowners’ insurance can add a sizable amount of money to your recurring home expenses. You’ll usually pay a portion of them each month as part of your monthly payment (this is called “escrow”). The lower these fees, the lower your payment will be — and the bigger budget you’ll have.
In most cases, if your down payment is less than 20% of the home’s purchase price, you’ll be on the hook for private mortgage insurance (PMI). You also pay this monthly with your mortgage payment.
Homeowners association (HOA) fees
Some homeowners pay a mandatory monthly fee to their local homeowners association (HOA), which goes towards the maintenance and repair of shared areas (pools, landscaping, elevators and the like). If the house you want to buy has an HOA, don’t forget to factor this into your budget, too.
2. Don’t overextend yourself
Make sure you can comfortably afford the monthly mortgage payments. A general rule of thumb is that no more than 28% of your pre-tax income should go toward housing costs, though this can vary by lender.
Lenders often use the 28/36 rule to assess a borrower’s ability to afford the loan. Under this rule, housing expenses should take up 28% or less of your gross income. Your total debt payments, including credit card, other loans, and mortgage payments, should not exceed 36%.
In concrete terms, the 28/36 guideline means that a borrower earning $5,000 per month should not spend more than $1,400 on housing costs.
If you’re a renter making $5,000 a month, it’s a good rule of thumb to spend a maximum of $1,400 on rent. However, for a homeowner making the same amount, $1,400 (28%) should cover your monthly mortgage payment, homeowners’ insurance, mortgage insurance and property taxes.
The 28/36 rule may help prospective buyers determine the housing payment they’re comfortable with. But many lenders will determine your ability to afford a new home by using a higher total debt limit of 50% for conventional loans and 43% for jumbo loans. FHA and VA loans will have different limits.
3. Check your credit score
Request your credit report and find out your credit score before you start the application process.
Your credit score is a three-digit summary of your creditworthiness. Borrowers with high credit scores are typically offered the lowest interest rates, while lenders offer higher rates to those with lower scores.
You can get a free credit report from each of the three major credit bureaus. You should access your credit report, for example, if you’re the victim of identity theft or you may want to periodically check it to ensure the information is correct. A CARES Act program that provided free weekly reports from the three major credit bureaus during the pandemic has been permanently extended, allowing you to check as often as necessary.

4. Calculate your debt-to-income ratio
Your debt-to-income ratio (DTI) compares how much debt you owe to how much pre-tax income you earn per month. It’s an important metric that lenders use to determine how much you can borrow — or if you can borrow at all.
Lenders prefer borrowers with DTIs below the maximum allowed and may offer better interest rates to those borrowers. You can input your information and calculate your DTI using Money’s debt-to-income ratio calculator.
5. Make a down payment
If you don’t qualify for a VA loan, USDA loan or other 0% down payment mortgage program, most buyers will have to give a down payment on their potential home. Conventional loans typically require a minimum down payment of 5% of the purchase price. However, it could be as little as 3% if you have a low DTI ratio, a high credit score and meet other requirements.
For FHA loans, the minimum is 3.5%. While not required, a 20% down payment is often ideal. This could:

Lower your loan-to-value ratio
Reduce your monthly mortgage payment
Qualify you for a lower interest rate
Help you avoid private mortgage insurance (PMI)

If you don’t have enough money for a 20% down payment, you may be able to refinance your mortgage down the road, remove PMI, and, depending on the real estate market, snag a better interest rate. (For more info on refinancing, check out our list of the best mortgage refinance lenders and our mortgage refinance calculator.)
Ways to improve your house affordability
There are several options to consider if you are struggling to afford the home you have your eyes on. Some steps take time, while others can affect your mortgage application immediately.
Lower your DTI
DTI is one of the most important factors lenders consider when evaluating borrowers. Lowering your DTI by paying off as much debt as possible is a good option if your DTI is too high to get pre-qualified for a reasonable interest rate (or to qualify at all).
An optimal DTI is 36% or below, including possible housing costs, but excluding current rent payments, if any. If your monthly income is, for example, $5,000, then you shouldn’t owe more than $1,800 per month.
If your current debt is about $600 per month, your housing expenses could be as high as $1,200. Also, if you have already calculated all the expenses for a house and come up with a certain number, say $1,450, you should try to cut your $600 monthly payments by $250 to improve your chances of getting a loan.
Reducing your debts is your best bet for lowering your DTI, but increasing your income can help, too. You may want to ask for a raise or take on a side gig to help with expenses.
Raise your credit score
There are several ways to improve your credit score. First, check your credit report from all three bureaus — Experian, TransUnion, and Equifax — for inaccuracies. If there are mistakes in your credit history, you can file a dispute with the credit agencies. They are legally required to address any inaccuracies promptly, which should improve your score.
If the reported information is accurate, resolve any collection attempts, pay your bills on time every month, and, if possible, reduce your overall credit card debt. The higher your credit score, the lower your interest rate and monthly payment.
Consider applying for federal loans
The type of mortgage you’re requesting will help determine a lender’s flexibility in evaluating your loan application. Loans insured by the federal government — such as FHA loans, VA loans and USDA loans — all have certain benefits that may help you afford the home you want.
FHA loans
The Federal Housing Administration insures FHA loans. This means that banks get paid even if you default on your mortgage, and so are likely to be more flexible with their credit and down payment requirements. Note that, in order to qualify for an FHA loan, the borrower must intend to use the house as a primary residence and live in it within two months after closing.
VA loans
Borrowers who have served or have certain military connections may qualify for a VA loan. VA loans are more lenient than conventional and FHA loans. They’re backed by the Department of Veterans Affairs and typically don’t require a down payment.
Eligibility requirements depend on the period and amount of time you served in the military. However, there are many ways to qualify whether you’re a veteran, active duty service member, reservist or member of the National Guard. Discharged members also have opportunities.
To read more about the qualifications and process for getting a Certificate of Eligibility, visit the U.S. Department of Veterans Affairs. And if you’d like to explore your VA loan options, visit our best VA loans page.
USDA loans
USDA loans are backed by the U.S. Department of Agriculture and offer certain benefits that conventional loans don’t.
They’re designed to help finance homes in eligible rural areas. The desired property must be located in specific geographic areas, generally outside the boundaries of major metropolitan centers. It must also be a primary residence with a relatively low cost.
If you are eligible, USDA loans offer several benefits, including the ability to build, rehabilitate, improve, or relocate a dwelling as your primary residence to a new location. They also require no down payment.

Home Affordability FAQs
What salary do I need to buy a $400,000 house?
You’ll need a salary of $112,000 per year to buy a $400,000 house. This number assumes a 780 credit score, a 20% down payment, a 6.61% APR (as of August 20), a 28/36 debt-to-income ratio, homeowners insurance and property taxes. This calculation will change according to several factors: your actual DTI, down payment and the rate you qualify for.
How much cash do I need beyond the down payment?
You will need to pay between 2% and 5% of the loan amount in closing costs. On a $320,000 mortgage, that’s $6,400 to $16,000 in cash upfront. You will also need to pre-pay insurance, prepaid interest and property taxes to fund your escrow account. You can find these amounts in your loan estimate document.
Why did my lender approve me for more than I can afford?
A lender’s loan approval is based on your gross income and reported debt, and should be considered the maximum amount you can borrow. You will make payments from your take-home pay. To get a more accurate estimate based on your actual budget, take your approved monthly mortgage payment and subtract other regular expenditures, such as childcare, tuition, and maintenance costs.
How do student loans affect how much house I can afford?
Student loan payments count as part of your debt-to-income calculations. Even a $0 payment in your credit report won’t always count as $0. If you are in a deferred payment or forbearance plan, Fannie Mae lets the lender assume a payment equal to 1% of your outstanding balance. Freddie Mac allows lenders to assume a 0.5% payment. FHA loans have their own set of rules. Ask your lender how your student loan payments affect your DTI.

Summary of Money’s guide to home affordability
How much house you can afford depends mainly on two factors: your eligibility for a mortgage loan and your actual budget when it comes to paying monthly bills, along with taxes and insurance. Remember these steps when you’re getting ready to make your home purchase:

Calculate your monthly debt and compare it to your monthly gross income to estimate your DTI.

Consider other monthly expenses, such as utilities and groceries.

Save up for a down payment.

Consider all your loan options, such as FHA and VA loans.

Use a mortgage calculator to avoid any surprises.

TheStreet aims to feature only the best products and services. If you buy something via one of our links, we may earn a commission.

Why we love this deal

Bathrooms can easily feel too crowded when towels, toiletries, toilet paper, and cleaning supplies have nowhere to go. A narrow cabinet can be useful in a small bathroom, a guest bathroom with limited storage, or a rental where adding permanent shelving isn’t practical. It can also make an unused corner more functional, keeping everyday necessities accessible without taking up useful space and making the bathroom feel even more crowded. 

If you’re looking for a small storage option that can basically fit anywhere, the Hzuaneri Slim Storage Cabinet Organizer is a great choice. It’s on the smaller side, making it easy to use between the toilet and sink, behind the bathroom door, or in the corner of any room. The size makes it versatile for other areas, too, like the entryway closet, pantry, laundry room, or a dorm room. For just $35, this piece is as affordable as it is functional. 

Hzuaneri Slim Storage Cabinet Organizer, $35 (was $39) at Amazon

Courtesy of Amazon

Shop at Amazon

Why do shoppers love it?

Designed for compact spaces, this cabinet measures 7.9 inches deep, 9.9 inches wide, and about 32 inches tall, which is large enough to hold rolls of toilet paper or wipes, hand towels, beauty products, or small cleaning supplies. The closed storage section works well for items that don’t look tidy, even when packed away, such as makeup or shaving equipment, or it can be used to keep towels and tissue clean, even while sitting next to the toilet. The particle board is easy to clean, and the additional arch design in the door adds a unique look that makes your bathroom look more put together. 

Related: Walmart is selling farmhouse storage cabinets that can help you get organized, starting at $67

The organizer features a top shelf with walls that prevent items from rolling off, which is perfect for everyday items like lip gloss and lotions, or decorative candles. The two shelves underneath provide room for bottles, lotions, or small storage baskets. The bottom cabinet opens up to reveal two more cubbies with an adjustable shelf that can be lowered or removed completely, making room for larger items like a plunger or toilet brush. It also features an anti-tip kit if needed. 

Details to know

Sizes: This compact cabinet measures 7.9 inches deep, 9.9 inches wide, and about 32 inches tall.

Adjustable: The cabinet shelves are adjustable and removable.

Storage: It includes five shelves, with two of them hidden in a cabinet.

One reviewer wrote, “I have a small bathroom and needed a small cabinet to store toilet paper, soaps, personal hygiene items, etc. This cabinet is perfect for all of those small items but within arm’s reach. The assembly was easy, the quality is good because it feels stable, it looks great, and fits right in the small space.”Another shopper shared, “This item was exactly what the description stated, the measurements were dead on, the parts included an extra of each fastener, and the holes were perfect to ensure a tight and sturdy fit that should hold up.”

Shop more deals

Lxlxxl 2-Tier Stackable Wheeled Organizer with Window Cabinets $36 (was $40) at Amazon

Vecelo Narrow Bathroom Storage Cabinet, $53 (was $59) at Amazon

Delamu 3-Tier Under Sink Organizer 2-Pack, $30 (was $40) at Amazon

The Hzuaneri Slim Storage Cabinet Organizer is a useful addition to any space. The compact build and multiple storage options offer room for the essentials, while it’s small enough not to take over the room. At just $35, it’s a great deal from Amazon.

A few years ago, I realized I had made a major mistake in my budget. In one month, I owed over $600 for various annual bills and yearly memberships. The frustrating part was that none of these bills were unexpected; I just hadn’t budgeted for them.

After that, I knew I needed to get a grip on my annual bills the same way I had learned to budget for monthly bills.

In this article, I’ll help you create a list of your predictable annual expenses and build them into your monthly budget in a manageable way.

Later, I’ll share additional tips for your first year and examples of other long-term/irregular expenses that you can prepare for using the same method.

Tracking Annual Expenses

To get started, make a list of all the annual expenses that you can anticipate. 

Keep your list somewhere safe so that you can easily check for upcoming due dates and keep it updated throughout the year. I keep a simple “Finances” spreadsheet with one tab dedicated to annual expenses. You could just as easily keep a written list with your financial documents or save a note on your phone.

On your list, be sure to include the expense, the total due and its due date.

Here are a few examples of predictable annual expenses to get started: 

Insurance premiums (auto, renters, home, life, etc.)

Property tax

Memberships and subscriptions (Costco, Amazon Prime, clubs, organizations, gyms, apps, etc.)

Vehicle registration renewal

Credit card fees

You can check that you aren’t missing any annual expenses by reviewing the previous year. Here are a few ways to identify recurring annual payments: 

Review your bank statements

Search your email inbox

Use a subscription tracking tool or budgeting app

Once you’ve listed all your annual expenses, you can start planning for them. In the next section, I’ll take a closer look at how to break down these recurring annual expenses into a manageable monthly budget. 

Planning for Annual Expenses in Your Monthly Budget

If you break up all of your annual expenses into monthly payments, you’ll be ready for those larger bills, fees and renewals when they’re due. The simplest way to budget for annual expenses is to take the total due and divide it by 12. 

After listing my annual expenses and dividing the totals by 12, here’s what I had: 

Nearly all of my annual expenses happen to be due during the summer. However, saving $90/month throughout the year alleviates the stress of owing so much at once. 

You may notice that all of my totals are whole numbers and the due dates are either the 1st or 15th. These are two optional tips that work well for me: 

Round up your totals slightly to prepare for rising costs. 

Choose your nearest bill-pay day before the actual due date. For example, I pay bills on the 1st and 15th of every month.

With these two tips, I’m always prepared for the full bill before it’s due.

Pay Yourself Every Month

Now that you know what you need to save each month, follow your budget to be ready for your annual expenses. Treat your “Annual Expense Savings” amount like a monthly bill and pay it to yourself.

The best place for these monthly installments is in a high-yield savings account. Every month, contribute the same amount for annual expenses (total annual expenses ÷ 12). You can do this in one of three ways: 

Manually transfer from your checking to your savings as if you were paying a monthly bill. 

Set up automatic transfers from your checking account as if that monthly bill were autopay.

Set up direct deposit from your employer to automate your savings completely.

I recommend starting with manual transfers for the first 12 months before automating. You’ll likely need to make a few adjustments over the first year, which we’ll cover in the next section.

Also, if you use the same savings account for more than just these funds, be sure to track the money you’ve designated for annual expenses.

In my finance spreadsheet, I list each expense individually and add the monthly contributions after making a deposit. You could also track one comprehensive “annual expenses” fund.

As you approach due dates throughout the year, be ready to withdraw from your savings account. Since this can take a couple of business days, I always like to list my due dates slightly early. 

The First-Year Formula

Dividing an annual expense by 12 is a simple way to break it down into monthly payments. However, the first year that you budget for an annual expense, you may not have 12 months before its next due date. For this reason, your first year might look a little different. 

If you list an annual expense that will be due sooner than 12 months from now, you’ll need to save more for that bill until after its next due date. Then, you can re-adjust your monthly total.

To figure out how much you’ll need to save for each expense during the first year, follow this modified formula:

Total Due ÷ Number of Months Until Due Date = Monthly Savings

For example, I have an annual expense of $150 for renters insurance. Normally, I would need to save $12.50/month for 12 months. However, if the due date is only three months away, I would need to save $50/month. I can make this temporary change to my list with a note to update it after it’s paid:

Before Due Date (Due in 3 Months)

After Due Date (Due Again in 12 Months)

Once you’ve paid the upcoming bill, you can reduce its monthly savings to the original formula (Total ÷ 12). 

After your first year, you should have a solid number to save each month for annual expenses. At that point, it’s safe to automate your savings. Then, you’ll only have to make adjustments if you add or drop an expense, or if its annual price changes.

Additional Expenses To Consider

In addition to regular annual charges, you can use this same method to budget for other non-monthly expenses, additional savings and emergency funds.

Consider the following categories:

Car maintenance (oil changes, tires, battery, repairs, etc.)

Home repairs and improvement

Back-to-school shopping

Holiday shopping

Medical expenses

Travel savings

Tuition

Pets (food, vet funds, etc.)

General emergency savings

While these categories may not have specific due dates and totals, you can estimate how much you’ll need and how frequently. If you aren’t sure, review your spending over the last year.

Then, you can use the same formula to figure out your ideal monthly contribution: 

Total Saved ÷ Number of Months = Monthly Savings

For example, if I budget $900 to replace my car tires after five years, I can break it up to only $15/month with this formula. Alternatively, if I need ~$100 for an oil change every three months, I can save $33.50/month for that expense.

Final Thoughts

Planning for recurring or irregular non-monthly expenses is a great way to set yourself up for success. Using this method, you won’t have to rely on your emergency fund or other savings when an “unexpected” expense pops up. Instead, you’ll already have a designated fund prepared.

How do you plan for annual bills and other non-monthly expenses? Let us know in our Clark.com Community!
The post How To Track, Plan, and Budget for Annual Expenses appeared first on Clark Howard.

Fall is one of the most predictable seasons in the restaurant industry.

As temperatures begin to drop, major chains roll out limited-time flavors to bring customers back for familiar favorites. And few seasonal flavors have become as recognizable as pumpkin spice.

This fall, however, McDonald’s is taking a different approach, discontinuing a longtime favorite nationwide.

Rather than following the most established flavor trend in fall beverages, the fast-food giant is turning to a flavor combination more closely tied to one of its own longtime menu staples.

McDonald’s discontinues the Pumpkin Spice Latte in 2026

McDonald’s (MCD) has confirmed it is discontinuing its seasonal Pumpkin Spice Latte from its 2026 fall menu, ending the beverage’s 13-year tradition.

The Pumpkin Spice Latte was first launched at select McDonald’s locations in 2013 before becoming available nationwide in 2016, according to the company.

The fast-food giant is replacing the seasonal drink with a new Caramel Apple Pie coffee lineup as it brings innovation to its beverage business.

The limited-time offerings combine apple and caramel flavors with McDonald’s coffee and are topped with salted caramel-flavored whipped cream and crumbled apple pie pieces.

According to McDonald’s, the lineup includes:

Caramel Apple Pie Frappe

Hot Caramel Apple Pie Latte

Iced Caramel Apple Pie Latte

Caramel Apple Pie Iced Coffee

The new Caramel Apple Pie Coffees are available at participating McDonald’s restaurants nationwide for a limited time.

The lineup gives McDonald’s a different seasonal option as major coffee chains lean heavily into pumpkin-spice offerings during the fall.

Why McDonald’s is discontinuing the Pumpkin Spice Latte

McDonald’s has not simply replaced one seasonal flavor with another. The move is part of a broader, multi-year effort to expand its beverage business and create more occasions for customers to visit its restaurants.

The company has been investing in beverages as a growth opportunity, with its strategy extending beyond traditional McCafé offerings.

In March 2025, McDonald’s introduced its Restaurant Experience Team, bringing together operations, supply chain, franchising, development, restaurant design, delivery, and Speedee Labs. According to the company, the goal is to streamline innovation and improve execution across its markets.

McDonald’s also established three global Category Management teams focused on beef, chicken, and beverages/desserts, signaling a more specialized and data-driven approach to menu development.

The company’s beverage strategy has evolved over several years.

McCafé, which was added to its U.S. menus in 2009, expanded McDonald’s presence in coffee and premium beverages. The company later used CosMc’s, its beverage-focused concept, as a testing ground for new drinks and restaurant formats before closing all its locations in 2025.

Some of the lessons from those initiatives are now being incorporated into McDonald’s broader beverage strategy.

During McDonald’s fourth-quarter fiscal 2025 earnings call, executives said the company planned to expand its beverage offerings across the U.S. and select international markets in 2026. Beverages were identified as one of the company’s fastest-growing categories.

McDonald’s has estimated that beverages represent a global opportunity worth more than $100 billion.

In 2025, the company tested new beverages, including energy drinks, iced coffees, refreshers, and crafted sodas, at approximately 500 U.S. restaurants. Executives later described the test as “highly successful” and said it exceeded expectations.

“The new beverage offerings drove incremental occasions across different dayparts as well as higher average check,” McDonald’s Chief Restaurant Experience Officer Jill McDonald said during the company’s earnings call.

The strategy is already showing signs of traction.

McDonald’s discontinued its Pumpkin Spice Latte for fall 2026.Zhang Peng/LightRocket via Getty Images

Why beverages are strategically important in the restaurant industry

Beverages can be particularly attractive to restaurant operators because their ingredient costs can be relatively low compared with their selling prices.

However, it is important to distinguish gross margin and net profit margins. A beverage can carry a high gross margin without translating directly into the restaurant’s bottom line, since operators still have to cover labor, rent, utilities, marketing, technology, and other operating expenses.

Restaurant businesses overall tend to operate with relatively thin net margins. Restaurant365 places average restaurant profit margins in the low single digits, although profitability varies considerably by restaurant format and operating model.

Beverages can nevertheless provide an attractive margin because, despite requiring relatively inexpensive ingredients, many drinks can be sold at a significant markup.

The opportunity becomes even more significant when a beverage encourages a customer to make an additional visit or purchase.

That is particularly relevant to McDonald’s current strategy.

“In a landscape where consumers increasingly perceive grocery stores as offering ‘much better’ value (55 percent) than restaurants, limited-service restaurants must innovate to regain their footing,” Rich Products Senior Customer Marketing Manager Alyssa Barrett told QSR Magazine.

“Specialty beverages offer a way to refresh the value proposition — not just in terms of cost, but in experience, convenience, and customization.”

The broader industry is also facing pressure on consumers’ restaurant spending, making menu innovation an increasingly important way for chains to differentiate themselves.

McDonald’s sees early results

McDonald’s beverage strategy comes at a time when the company is working to improve its U.S. business.

During its second quarter of fiscal 2026, McDonald’s U.S. comparable sales increased 0.8%, driven by positive check growth, including favorable product mix. The improvement was partially offset by a decline in comparable guest counts.

Here’s some of my previous coverage of McDonald’s:

McDonald’s drops 6 new drinks and a surprising fashion collab

McDonald’s brings back fan-favorite Happy Meal

McDonald’s unexpectedly adds 10 new chicken menu items

McDonald’s CEO Chris Kempczinski said on the company’s latest earnings call that the U.S. business had slowed significantly and fell short of expectations, citing execution issues during the quarter.

Still, the company’s new beverage platform delivered an early positive signal.

McDonald’s launched the new beverage platform in May, and executives said early results exceeded expectations across its lead markets of the U.S., Canada, and Germany.

In the U.S., beverage sales were ahead of plan, with the company reporting higher guest checks and new customer occasions throughout the day. 

That gives McDonald’s another reason to continue expanding the category.

The decision to remove the Pumpkin Spice Latte from its 2026 fall menu therefore represents more than a change in seasonal flavor.

It gives McDonald’s an opportunity to test whether a beverage tied to the brand’s apple pie heritage can generate the same kind of seasonal excitement while supporting a broader strategy to make drinks a larger part of the customer experience.

Related: McDonald’s unveils unexpected first-ever partnership

In the midst of a major remodel of the largest stadium in tennis, explore what’s new and what’s still coming at Arthur Ashe Stadium

RAJ Sports and Kaiser Permanente unveil a $150M performance center for women athletes, designed around their unique health, performance and family needs.

It seemed too good to be true. A $60,000 deposit from the Social Security Administration landed in a woman’s bank account with no explanation, as if she had won the lottery without buying a ticket.
But is this a real windfall, or has she been caught up in a grand mistake? And more importantly, what should she do with the money?

Must Read

10 Smart Ways Seniors Are Earning Extra Money
Your Social Security Number Isn’t ‘Suspended’ — That Phone Call Is Probably a Scam
Silver Is Up 70% Since This Time Last Year — and These Gold IRA Companies are Handing Out Up to $25,000 of It

“Don’t spend a cent,” reads a top comment on a post about the incident in the subreddit r/Social Security. Others guessed that it might be a real back payment, commenting that such a large deposit likely requires approval from multiple people working for the federal government.
The woman who received the money is unemployed and receives Social Security Disability Insurance (SSDI), her 22-year-old child explained in the post. About three months prior, the mother’s monthly SSDI payment doubled. The family was already waiting for an explanation of that increase before the $60,000 deposit arrived.
“We have been scratching our brains trying to figure out why she got such a big deposit,” the user adds.
Expert advice: ‘This is very likely legitimate’
Carter McClung, director of financial planning at Blue Rock Financial Group, says that this seemingly random deposit may, in fact, be her money.
“Short version: This is very likely legitimate and most likely the result of a long-overdue correction. It appears to be a combination of (1) corrected primary SSDI benefits and (2) retroactive auxiliary (dependent) benefits that were never paid,” McClung explains in an email.
The Reddit post states that the older woman tried calling repeatedly for answers about the original increased monthly payment; however, Social Security Administration representatives would only confirm that they were looking into the matter.
McClung says he suspects that the woman’s calls prompted further investigation of her benefits, prompting a correction for past mistakes. SSDI payments are based on a benefit formula tied to past earnings, among other factors, and it’s not uncommon for the calculations to be wrong.
When the lump sum arrived, the family called again and eventually got more information.
“They said that every six months they were supposed to review her account and adjust if needed but never did that in the 23 years she was on disability,” the post reads, adding that the representative also mentioned a back payment for an issue related to dependents.

Must Read

Retirees Are Doing These 10 Things to Add to Their Monthly Income
Your Social Security Number Isn’t ‘Suspended’ — That Phone Call Is Probably a Scam
Warren Buffett on Market Volatility — and 3 Ways You Can Take Advantage

This last part is a big clue, McClung says.
The woman has at least three children, and it appears they were not fully accounted for in dependent calculations, he says. People who get SSDI benefits can receive up to 50% of the primary benefit for each eligible dependent, subject to a family maximum.
“If auxiliary benefits were never activated, that’s a significant administrative error,” McClung says. “The fact that her monthly benefit recently doubled is a strong indicator SSA corrected the ongoing calculation first, then issued a lump-sum underpayment later. That sequencing is common and usually signals a correction.”
Still, he adds, her best bet is to play it safe until she can get further clarification from the government. She should wait for written confirmation officially labeling the payment and obtain a payment history statement before spending the funds.
 

Ed Yardeni, who has been called the most bullish person on Wall Street, says he hasn’t been bullish enough on the stock market.