Mortgage Affordability Calculator

Calculate how much house you can afford based on your income, debts, and down payment with instant, accurate results.

Your Financial Details

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

Understanding Home Affordability

Determining how much house you can afford is one of the most critical steps in the home buying process. Lenders evaluate your financial situation using the debt-to-income (DTI) ratio, which compares your total monthly debt payments to your gross monthly income. Most conventional loans require a DTI of 43% or less, though some government-backed loans allow higher ratios for qualified borrowers.

Your monthly mortgage payment includes more than just principal and interest. Property taxes, homeowners insurance, and PMI (if your down payment is less than 20%) significantly impact affordability. Many buyers also face HOA fees in planned communities or condominiums. This calculator factors in all these costs to provide a realistic estimate of your maximum home price and monthly payment obligations.

The 20% down payment benchmark remains ideal because it eliminates PMI and often secures lower interest rates. However, numerous loan programs exist for buyers with smaller down payments: FHA loans require just 3.5% down, conventional loans can go as low as 3%, and VA loans offer 0% down for eligible veterans. While lower down payments increase accessibility, they result in higher monthly payments and long-term interest costs.

Beyond the calculator's results, consider your lifestyle, future income potential, and financial cushion for emergencies. Being approved for a certain amount doesn't mean you should maximize your budget. Many financial advisors recommend keeping housing costs below 28% of gross income to maintain financial flexibility, build savings, and enjoy life beyond mortgage payments. Use this calculator as a starting point for conversations with lenders and real estate professionals.

How to Use This Calculator

1. Enter Your Annual Household Income

Include all sources of gross income before taxes: salary, bonuses, self-employment income, alimony, or investment income that lenders will verify.

2. Add Monthly Debt Payments

List all recurring monthly debt obligations: car loans, student loans, credit card minimum payments, personal loans, and child support. Do not include utilities or groceries.

3. Set Your Down Payment Percentage

20% eliminates PMI, but many programs allow 3-5% down. Higher down payments reduce monthly costs and improve loan terms.

4. Input Current Interest Rates

Check current mortgage rates online or from lenders. Rates vary based on credit score, loan type, and down payment amount.

5. Choose Your Loan Term

30-year loans offer lower monthly payments, while 15-year loans save significantly on total interest paid over the life of the loan.

6. Adjust Property Costs

Property tax rates, insurance premiums, and HOA fees vary by location. Research typical costs in your target area for accurate results.

7. Review Your Payment Breakdown

Toggle the detailed breakdown to see exactly where your monthly payment goes and understand your debt-to-income ratio.

Affordability Results

Maximum Home Price
$365,000
Monthly Payment
$2,361
Down Payment
$73,000
Loan Amount
$292,000
Estimated Closing Costs
$10,950

Typically 2-5% of home price

Debt-to-Income Ratio42.9%

Good

💡
Tip:

These are estimates. Actual pre-approval amounts depend on credit score, employment history, and lender requirements.

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Frequently Asked Questions

How much house can I afford?
Most lenders use the 28/36 rule: your monthly housing costs should not exceed 28% of gross monthly income, and total debt payments should stay under 36%. However, many lenders now approve up to 43% debt-to-income ratio for qualified borrowers.
What is included in monthly mortgage payments?
Monthly mortgage payments typically include Principal & Interest (P&I), Property Taxes, Home Insurance, PMI (if down payment is less than 20%), and HOA fees if applicable. This is often abbreviated as PITI or PITIA.
What is debt-to-income ratio (DTI)?
Debt-to-income ratio is your total monthly debt payments divided by gross monthly income. Lenders use DTI to assess your ability to manage monthly payments. A DTI of 43% or lower is typically required for qualified mortgages, though some loan programs allow higher ratios.
How much should I put down on a house?
A 20% down payment is ideal because it eliminates PMI (private mortgage insurance) and often secures better interest rates. However, many buyers use FHA loans (3.5% down), conventional loans (3-5% down), or VA loans (0% down for eligible veterans).
What are closing costs?
Closing costs typically range from 2-5% of the home purchase price and include loan origination fees, appraisal fees, title insurance, escrow fees, and prepaid property taxes and insurance. This calculator estimates 3% for planning purposes.
What is PMI and when can I remove it?
Private Mortgage Insurance (PMI) is required when your down payment is less than 20%. PMI typically costs 0.5-1% of the loan amount annually. You can request PMI removal once you reach 20% equity, and it automatically terminates at 22% equity.
Should I include HOA fees in affordability calculations?
Yes, absolutely. HOA fees are mandatory monthly expenses that lenders include when calculating your debt-to-income ratio. HOA fees can range from $100-500+ per month and significantly impact how much home you can afford.
Is this calculator accurate for pre-approval?
This calculator provides reliable estimates for planning, but actual pre-approval amounts depend on your credit score, employment history, assets, and specific lender criteria. Always consult with a mortgage lender for official pre-approval.