Home Affordability Calculator
Find out how much house you can afford based on your income, debts, and down payment.
Additional Information and Definitions
Annual Household Income
Enter your total yearly household income before taxes.
Monthly Debt Payments
Enter your total monthly debt payments including car loans, student loans, and credit cards.
Down Payment
Enter the amount you plan to put down on your home purchase.
Interest Rate
Enter the expected annual mortgage interest rate.
Calculate Your Home Budget
Enter your financial details to determine your ideal home price range.
Loading
Home Affordability Terms
Understanding key concepts in home affordability:
Debt-to-Income Ratio (DTI):
The percentage of your monthly income that goes toward paying debts. Lenders typically prefer a DTI ratio of 43% or less.
Front-End Ratio:
The percentage of your monthly income that would go toward your housing payment, including principal, interest, taxes, and insurance (PITI).
Back-End Ratio:
The percentage of your monthly income that goes toward paying all monthly debt payments, including your potential mortgage and other debts.
PITI:
Principal, Interest, Taxes, and Insurance - the four components that make up your monthly mortgage payment.
Smart Tips for Home Affordability
Understanding how much house you can afford involves more than just your income. Here are some insights to help you make a wise decision.
1.The 28/36 Rule
Most financial advisors recommend the 28/36 rule: spend no more than 28% of your gross monthly income on housing expenses and no more than 36% on total debt payments.
2.Hidden Costs
Remember to factor in property taxes, insurance, utilities, maintenance, and HOA fees when calculating affordability. These can add 1-4% of your home's value annually.
3.Emergency Fund Impact
Having a solid emergency fund (3-6 months of expenses) can help you qualify for better mortgage rates and provide security in homeownership.
4.Future-Proof Planning
Consider buying less house than you can afford maximum. This creates financial flexibility for future life changes, home improvements, or investment opportunities.