House Affordability Calculator

Estimate how much house you can afford based on your income and financial situation

Income & Expenses

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Enter your total gross annual income before taxes

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Include bonuses, rental income, etc.

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

Mortgage Details

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Ratio of housing payment to income / total debt payment to income

Home Affordability Results

Based on your income and financial details

How much home can you afford?

You can afford a $0.00 home

Affordability Breakdown

Max Loan Amount
$0.00
Down Payment
$60,000.00 (20.0%)
Monthly Principal & Interest
$0.00
Monthly Property Tax
$0.00
Monthly Insurance
$0.00
Monthly HOA Fees
$0.00
Total Monthly Housing Payment
$0.00
Front-End Ratio
0.00%%
Back-End Ratio
0.00%%

Price Range Options

Conservative: $0.00
Moderate: $0.00
Aggressive: $0.00

Understanding Affordability

Front-End Ratio: The percentage of your monthly income that goes toward housing expenses.

Back-End Ratio: The percentage of your monthly income that goes toward all debt payments, including housing.

Conservative: Follows traditional lending guidelines with front-end ratio of 28% and back-end ratio of 36%.

Moderate: Uses slightly higher debt ratios that many lenders may still approve.

Aggressive: Approaches the maximum debt ratios some lenders will allow, but leaves little room in your budget.

Remember that affordability is not just about what lenders will approve - it's about what's comfortable for your budget and lifestyle.

Understanding Home Affordability: Beyond the Calculator

While our calculator provides a solid estimate of what you can afford, home buying involves many other financial considerations. Understanding the complete picture can help you make a more informed decision and avoid potential financial strain.

The 28/36 Rule: A Financial Guideline

Financial advisors often recommend the 28/36 rule as a guideline for housing affordability:

  • 28% Rule: Your monthly mortgage payment (including principal, interest, taxes, and insurance) should not exceed 28% of your gross monthly income.
  • 36% Rule: Your total monthly debt payments (including your mortgage and all other debt like car loans, student loans, and credit cards) should not exceed 36% of your gross monthly income.

For example, if your household earns $8,000 per month before taxes, your housing costs should ideally stay below $2,240 (28%), and your total debt payments (including housing) should not exceed $2,880 (36%).

Hidden Costs of Homeownership

Many first-time homebuyers focus only on the mortgage payment, overlooking these significant expenses:

Maintenance & Repairs

Budget 1-3% of your home's value annually for maintenance. Older homes generally require more maintenance than newer constructions.

Utilities

Electricity, water, gas, trash removal, internet, and possibly HOA fees can add hundreds of dollars to your monthly housing costs.

Property Insurance

Beyond standard homeowners insurance, you may need flood, earthquake, or other specialized insurance depending on your location.

Impact of Different Down Payments

Down PaymentBenefitsConsiderations
3-5%
(Minimum)
  • Lower initial cash outlay
  • Get into homeownership sooner
  • Available for FHA and some conventional loans
  • Higher monthly payments
  • Mortgage insurance required
  • Higher interest rates possible
  • Less equity at the start
10-15%
(Moderate)
  • Lower mortgage insurance costs
  • Better interest rates than minimum down
  • More manageable than 20% for many buyers
  • Still requires mortgage insurance
  • Higher payments than 20% down
20%+
(Traditional)
  • No mortgage insurance required
  • Lower monthly payments
  • Better interest rates
  • More equity from the start
  • Stronger offers in competitive markets
  • Requires significant savings
  • Could deplete emergency funds
  • May delay homeownership

Different Mortgage Types and Their Impact

The type of mortgage you choose significantly affects your affordability and financial flexibility:

Fixed-Rate Mortgages

Best for: Long-term homeowners who value payment stability

  • Pros: Consistent payments, protection from rate increases
  • Cons: Higher initial rates than ARMs, less flexibility
  • Impact on affordability: May qualify for less house compared to adjustable rates, but provides long-term budget predictability

Adjustable-Rate Mortgages (ARMs)

Best for: Short-term homeowners or those expecting increasing income

  • Pros: Lower initial rates, potentially more house initially
  • Cons: Payment uncertainty after fixed period, potential for significant increases
  • Impact on affordability: Can increase initial buying power but may create budget stress later if rates rise

Regional Considerations

Housing affordability varies dramatically by location. Consider these regional factors:

High-Cost Areas

  • • Special loan programs like jumbo loans may be necessary
  • • Property taxes and insurance typically much higher
  • • Consider commute costs vs. premium for central locations
  • • Look for high-cost area loan limits from FHA/Conventional loans

Rural/Lower-Cost Areas

  • • USDA loans offer 0% down payment options
  • • Property taxes often lower, but verify all local taxes
  • • Budget for potentially higher transportation costs
  • • Consider availability and cost of services (internet, utilities)

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