Estimate how much house you can afford based on income, expenses, down payment, and mortgage rates.
Enter values and click Calculate to see results.
Estimate how much house you can afford based on income, expenses, down payment, and mortgage rates.
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Read full articleThe Home Affordability Calculator uses the following formula:
The calculation is performed automatically when you click the Calculate button, ensuring error-free results every time. Understanding the formula helps you interpret the results more effectively and see exactly how each input affects the final outcome.
Follow these steps to use the Home Affordability Calculator:
Enter the annual income in the provided input field (e.g., 100000).
Enter the monthly debts in the provided input field (e.g., 500).
Enter the down payment in the provided input field (e.g., 50000).
Enter the interest rate (%) in the provided input field (e.g., 6.5).
Enter the loan term (years) in the provided input field (e.g., 30).
Enter the property tax rate (%) in the provided input field (e.g., 1.2).
Enter the annual insurance in the provided input field (e.g., 1200).
Click the "Calculate" button to compute your results.
Review the detailed results, including charts and breakdowns.
Use the "Reset" button to clear all fields and start a new calculation.
Try the "Load Example" button to see a sample calculation with predefined values.
Here is a practical example to help you understand how the Home Affordability Calculator works.
Enter these values into the calculator (or click “Load Example Values”) to see how the formula produces accurate results.
When using the Home Affordability Calculator, be aware of these common mistakes:
Taking a moment to verify your inputs will ensure the most accurate results.
For the best results when using the Home Affordability Calculator, follow these expert tips:
Most lenders use the 28/36 rule: Your housing payment should not exceed 28% of your gross monthly income, and total debt payments should not exceed 36%.
The 28% front-end ratio means housing costs (PITI) should be under 28% of gross income. The 36% back-end ratio includes all debt payments.
Higher credit scores qualify for lower interest rates, which increases how much house you can afford. A 760+ score gets the best rates.
Private Mortgage Insurance is required when down payment is less than 20%. It typically costs 0.5-1% of the loan amount annually.
While 20% avoids PMI, many conventional loans accept as little as 3% down. FHA loans allow 3.5% down.
Closing costs are 2-5% of the home price and include appraisal, title insurance, origination fees, and prepaid taxes/insurance.
Lenders prefer DTI below 43%. A lower DTI means you can qualify for a larger loan and better rates.
Yes, these are part of PITI (Principal, Interest, Taxes, Insurance) and are often escrowed into your monthly payment.