Home Affordability Calculator
Determine how much house you can afford based on your income, debts, and debt-to-income ratios. Get personalized recommendations and see how different scenarios affect your buying power.
Ready to Calculate
Enter your financial information to see how much home you can afford
Debt-to-Income Ratio (DTI)
Your DTI ratio is the percentage of your gross monthly income that goes toward debt payments, including the new mortgage.
DTI Guidelines:
- • Excellent: 28% or less
- • Good: 28-36%
- • Acceptable: 36-43%
- • High Risk: Over 43%
Formula: (Total Monthly Debts + New Housing Payment) ÷ Gross Monthly Income × 100
Down Payment Strategy
Your down payment affects both your loan amount and monthly payments, directly impacting affordability.
Down Payment Options:
- • 20%+: No PMI, best rates
- • 10-19%: Conventional with PMI
- • 3-5%: FHA/VA loans available
- • 0%: VA loans for veterans
Tip: Every $1,000 additional down payment can increase your affordability by $4,000-$5,000.
Interest Rate Impact
Interest rates dramatically affect your buying power. Small rate changes create large affordability differences.
Rate Impact Example:
On a $500,000 home (30-year loan):
- • 6.0%: $2,398/month
- • 7.0%: $2,661/month (+$263)
- • 8.0%: $2,935/month (+$537)
Strategy: Get pre-approved to lock in current rates and understand your true budget.
Beyond Principal & Interest
Your total housing payment includes more than just principal and interest (PITI + extras).
Monthly Housing Costs:
- • Principal & Interest: Loan payment
- • Property Taxes: 0.5-2.5% annually
- • Home Insurance: 0.3-1.5% annually
- • PMI: 0.3-1.5% if down < 20%
- • HOA Fees: $50-500+ monthly
Budget Rule: Total housing costs should not exceed 28-30% of gross income.
Pre-Approval Process
Get pre-approved to understand your true buying power and strengthen your offers.
Documents Needed:
- • 2 years of tax returns
- • Recent pay stubs
- • Bank statements (2-3 months)
- • Credit report authorization
- • Asset documentation
Benefit: Pre-approval letters show sellers you're a serious, qualified buyer.
Smart Buying Tips
Make informed decisions to maximize your buying power and long-term financial health.
Key Strategies:
- • Pay down debts before applying
- • Save for closing costs (2-5%)
- • Keep 3-6 months emergency fund
- • Factor in moving/furnishing costs
- • Consider future income changes
Remember: Maximum affordability ≠ comfortable affordability. Leave room for life.
Affordability vs. Comfort: Finding Your Sweet Spot
While lenders may approve you for a certain amount, consider your lifestyle, savings goals, and financial security when determining your actual budget.
Conservative Approach
25% of gross income for total housing costs. Prioritizes financial flexibility and savings.
Moderate Approach
28-30% of gross income. Balanced between housing and other financial goals.
Aggressive Approach
Up to 36% of gross income. Maximizes housing budget but requires careful planning.