Home Affordability Calculator

How much house can you afford? This calculator helps you determine your home buying budget based on your income, existing debts, available down payment, and other important factors.

Home Affordability Calculator

Determine how much house you can afford based on your income, debts, and other financial factors.

Usually between 28% and 43%

Results

What You Can Afford

Maximum Home Price:$0
Maximum Loan Amount:$0
Estimated Monthly Payment:$0/month

Monthly Payment Breakdown

Price Options by Comfort Level

Understanding Your Results

Conservative Price: A safer option that leaves more room for unexpected expenses.

Moderate Price: Balance between your financial capacity and budget comfort.

Aggressive Price: The maximum you might afford, but with less financial wiggle room.

Income-to-Value Ratio: 0.00 - This ratio is low, meaning the house price is high relative to your income.

How to Use the Affordability Calculator

Understanding the Inputs

  • Annual Gross Income: Your total income before taxes.
  • Monthly Debts: Total of your monthly payments for credit cards, auto loans, student loans, and other debts.
  • Down Payment: Amount you can pay immediately for your home purchase.
  • Interest Rate: Estimated mortgage interest rate.
  • Loan Term: Period over which you'll repay your loan.
  • Property Tax Rate: Annual percentage based on property value.
  • Home Insurance: Estimated annual cost to insure your home.
  • HOA Fees: Monthly fees for homeowners associations, if applicable.
  • Debt-to-Income Ratio: Maximum percentage of your monthly income that can go toward all debts, including mortgage.

Understanding the Results

  • Maximum Home Price: The total amount you can afford to spend on a home.
  • Maximum Loan Amount: The amount you could borrow.
  • Total Monthly Payment: Estimate of what you'll pay each month.
  • Payment Breakdown: Distribution of your monthly payment among principal, interest, taxes, and insurance.
  • Price Options: Different options based on your financial comfort level.

Tips to Optimize Your Home Buying Budget

Improve Your Affordability

  • Reduce your existing debts before buying
  • Increase your down payment to reduce the loan amount
  • Improve your credit score to get better rates
  • Consider areas with lower property taxes
  • Explore different loan term options

Important Considerations

  • Don't limit yourself to just the mortgage payment
  • Plan for an emergency fund for unexpected repairs
  • Account for moving and furnishing costs
  • Consider transportation costs from your new residence
  • Don't forget closing costs when purchasing

Affordability Rule of Thumb

Financial experts generally suggest following these principles:

  • The 28/36 Rule: Don't spend more than 28% of your gross income on housing expenses and no more than 36% on total debt.
  • Home Price: Traditionally, it's recommended that a home price not exceed 3 to 5 times your annual income.
  • 20% Down Payment: Aiming for a down payment of at least 20% can help you avoid private mortgage insurance and get better terms.