Home Affordability Calculator

Income & Employment

Include car loans, student loans, credit cards, etc.

Down Payment

Loan Details

Additional Monthly Costs

About This Home Affordability Calculator

Our home affordability calculator helps you estimate how much house you can afford based on your income, debts, and other financial factors. It uses standard lending guidelines to determine your maximum home price while considering:

  • Your annual household income
  • Monthly debt obligations
  • Down payment amount
  • Current mortgage rates
  • Property taxes and insurance
  • HOA fees if applicable

Understanding Home Affordability

Lenders typically use two key debt-to-income (DTI) ratios to determine how much you can borrow:

Front-End DTI Ratio (28%)

Your monthly mortgage payment should not exceed 28% of your gross monthly income. This includes:

  • Principal and interest
  • Property taxes
  • Home insurance
  • HOA fees

Back-End DTI Ratio (36%)

Your total monthly debt payments should not exceed 36% of your gross monthly income. This includes:

  • Mortgage payment
  • Car loans
  • Student loans
  • Credit card payments
  • Other debt obligations

Down Payment Considerations

Conventional Loans

  • 20% down: No PMI required
  • 5-19% down: PMI required
  • Better interest rates with larger down payments

FHA Loans

  • Minimum 3.5% down payment
  • MIP required regardless of down payment
  • Good for first-time buyers

VA Loans

  • No down payment required
  • No PMI required
  • Available to eligible veterans

Additional Costs to Consider

  • Closing Costs: Typically 2-5% of the loan amount
  • Moving Expenses: Budget for moving and initial setup costs
  • Home Maintenance: Set aside 1-2% of home value annually
  • Utilities: Additional monthly expenses not included in mortgage payment
  • Emergency Fund: Maintain 3-6 months of housing payments in savings

Tips for Improving Home Affordability

  1. Increase Your Down Payment: Reduces loan amount and monthly payments
  2. Improve Your Credit Score: Better credit means better interest rates
  3. Pay Down Existing Debt: Lowers your DTI ratio and increases borrowing power
  4. Consider Different Locations: Property taxes and insurance vary by area
  5. Shop Multiple Lenders: Compare rates and terms to find the best deal

Important Notes:

  • This calculator provides estimates based on standard lending guidelines
  • Actual loan approval amounts may vary by lender
  • Your credit score significantly impacts loan terms and rates
  • Consider getting pre-approved before house hunting
  • Consult with a mortgage professional for personalized advice