Calculate how much house you can afford based on your income and debts
This calculator helps you estimate how much house you can afford based on your income, existing debts, and financial situation. It uses industry-standard debt-to-income ratios to determine your maximum home purchase price.
The calculator provides several key figures:
Lenders typically use the 28/36 rule to determine mortgage affordability:
Beyond your monthly payment, budget for:
This is your actual loan payment. Early in the loan, most goes toward interest. Over time, more goes toward principal. The payment amount stays the same for fixed-rate mortgages.
Typically paid to your local government and vary widely by location. Average U.S. property tax rate is around 1.1%, but can range from 0.3% to over 2% depending on your state and municipality.
Required by lenders to protect the property. Costs vary based on home value, location, coverage amount, and deductible. Average annual cost is $1,200-$2,000 but can be much higher in disaster-prone areas.
Required when your down payment is less than 20% of the home price. PMI protects the lender if you default. Typically costs 0.5-1% of the loan amount annually. Can be removed once you reach 20% equity.
If you buy a condo, townhouse, or home in a planned community, you may pay monthly HOA fees for shared amenities and maintenance. These can range from $100 to $500+ per month.
While 20% is ideal to avoid PMI, many buyers put down less. FHA loans require as little as 3.5% down, and conventional loans can go as low as 3%. However, larger down payments mean lower monthly payments and less interest paid over the life of the loan.
Not necessarily. Lenders approve you for the maximum they're willing to lend, but that doesn't mean it's comfortable for your budget. Consider your lifestyle, savings goals, and other financial priorities. Many experts recommend staying well below your maximum approval amount.
Minimum credit scores vary by loan type. FHA loans may accept scores as low as 580 (or 500 with 10% down). Conventional loans typically require 620 or higher. For the best rates, aim for 740+. Higher scores can save you tens of thousands in interest over the life of your loan.
Closing costs typically range from 2-5% of the purchase price. On a $300,000 home, expect $6,000-$15,000 in closing costs. These include loan origination fees, appraisal, title insurance, attorney fees, and prepaid items like property taxes and homeowners insurance.
Yes, if you're applying jointly, you can combine both incomes. This typically increases your borrowing power significantly. However, both incomes and all debts from both applicants will be considered in the calculation.
Self-employed borrowers can still qualify but may need to provide additional documentation, typically two years of tax returns and profit/loss statements. Lenders may average your income over two years, which can be challenging if your income fluctuates.
15-year mortgages have higher monthly payments but significantly lower total interest costs and typically lower interest rates. 30-year mortgages offer lower monthly payments and more flexibility but cost more in interest over time. Choose based on your monthly budget and long-term financial goals.
You can typically request PMI removal once you reach 20% equity in your home (80% loan-to-value ratio). Federal law requires automatic termination at 22% equity if you're current on payments. You may need to pay for a new appraisal to prove your home value.
Yes, many states and localities offer first-time buyer programs with lower down payments, reduced interest rates, or down payment assistance. FHA loans are also popular with first-time buyers due to lower credit score requirements and 3.5% down payment options.
This calculator provides estimates only and should not be considered financial, legal, or tax advice.
The calculations are based on:
Important notes:
Always consult with a qualified mortgage lender or financial advisor before making home buying decisions. Get pre-approved to understand your actual borrowing power based on your complete financial picture.