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Home Affordability Calculator

Credit Score (Optional)

Budget

Housing up to 28% of gross income, and housing plus debts up to 36%: the traditional guideline.

Loan Term

Estimated from Freddie Mac's 7.28% 30-year average (Oct 1, 2026). Enter a quoted rate to use it instead.

Maximum Purchase Price: $266,238
Down Payment: $53,248
Loan Amount: $212,990
Estimated Monthly Payment$1,867
Cash Needed at Closing$58,377
Principal & Interest
$1,475 (79%)
Property Tax
$266 (14%)
Home Insurance
$125 (7%)

Assumes a 7.405% rate on a 30-year fixed loan: an estimate for Good credit, based on Freddie Mac's 7.28% 30-year average for Oct 1, 2026. Lenders quote different rates; enter yours under Interest Rate.

How this was worked out

Loan
30-year fixed at 7.405%
Down payment
20% ($53,248)
Income limits
Housing up to 28% and housing plus debts up to 36% of gross income. The housing limit sets your budget: $1,867/mo.
Property tax
1.2% of the price a year ($266/mo)
Insurance
$1,500 a year
Closing costs
$5,130 (1% origination plus fees), paid at closing
Total loan
$212,990

Change any of these under Advanced.

Estimates for informational purposes only — not financial advice.

Compare scenarios

Pin the numbers on screen, change any input, and see them side by side.

Determining Your Home Affordability

A home affordability calculator is a tool that helps you estimate how much you can realistically afford to spend on a new home. It analyzes your income, monthly debts, and savings to provide a budget that aligns with your financial situation. By understanding your affordability, you can shop for a home with confidence and avoid stretching yourself too thin financially.

How this calculator works

Works backward from your income, debts and savings to the highest home price whose full monthly payment fits two income limits, one for housing and one for housing plus your other debts, and whose cash to close fits your savings.

How it calculates

  1. Housing budget = the lower of two limits: gross monthly income × the housing ratio, and gross monthly income × the total-debt (DTI) ratio − your monthly debt payments.
  2. Principal and interest, mortgage insurance and a percentage property tax all grow in step with the price, so the price that uses the whole budget is solved directly. It is then checked at that price, in case PMI or FHA's premium changes there.
  3. Principal and interest assume a fixed-rate loan over the term you pick: 30, 20 or 15 years. The rate starts from Freddie Mac's weekly 30-year average (7.28% for the week of Oct 1, 2026), or its 15-year average (6.6%) for a 15-year loan, with a 20-year loan halfway between, and is adjusted for credit: on a conventional loan, from 0.1 points lower for exceptional credit to 0.5 points higher for poor. Enter your own quote to replace it.
  4. A conventional loan above 80% of the price adds PMI by credit tier and down payment: at 5% down, from 0.38% a year for exceptional credit to 1.2% for poor, less with more down and more at 3% down. An FHA loan adds HUD's 1.75% upfront premium and its annual premium.
  5. If you enter savings, the price is also capped so the down payment and, unless you finance them, the closing costs (origination fee plus appraisal, title and other fees) fit. The lower of the two limits wins.

What it assumes

  • Comfortable, the default, is the traditional 28/36 guideline: housing up to 28% of gross income and housing plus debts up to 36%. Lender max uses Fannie Mae's 45% total for manually underwritten loans on a conventional loan, and FHA's standard 31% housing and 43% total. Custom lets you set both (above 50%, Fannie Mae's limit for automated underwriting, conventional loans generally can't be approved).
  • A 30-year term unless you pick 20 or 15 years. A shorter term costs less interest but raises the payment, so the same budget buys less house. No weekly survey covers 20-year loans, so that rate is an estimate between the 15- and 30-year averages.
  • PMI rates are planning estimates, not quotes: the steps between down-payment bands follow MGIC's published borrower-paid rate card. Tiers: exceptional 800–850, very good 740–799, good 670–739, fair 580–669, poor below 580.
  • Property tax, insurance and HOA dues as entered, the same every year.
  • Your monthly debts are the minimum payments you owe now, before the new mortgage.

Sources

Copy and figures last reviewed .

How we build and check all our calculators

Frequently Asked Questions

What percentage of my income should go to a mortgage?

A traditional guideline is to keep housing costs under about 28% of gross monthly income, and total debt payments — housing plus cars, cards, and student loans — under about 36%. That is this calculator's Comfortable setting. Lenders often approve more: Fannie Mae allows total DTI up to 45% on manually underwritten loans with strong credit and reserves, and up to 50% through its automated approval, while FHA's standard limits are 31% for housing and 43% in total. Lender max shows that ceiling, and Custom lets you set both ratios yourself. A comfortable budget is usually below the most a lender will allow.

How is my debt-to-income (DTI) ratio calculated?

DTI is your total monthly debt obligations — the future housing payment plus car loans, student loans, credit card minimums, and similar debts — divided by your gross (pre-tax) monthly income. This calculator works backward from two limits: your income times the housing ratio, and your income times the total-debt ratio minus your existing debts. The lower of the two is the housing payment you can afford, which it then converts into a purchase price.

How does my credit score affect how much house I can afford?

In two ways. A lower score usually means a higher interest rate, and even half a percentage point of rate meaningfully shrinks the loan a given payment can support. If your down payment is under 20%, your score also sets your PMI rate: in this calculator's estimates, very good credit pays 0.46% of the loan a year and fair credit 0.95%, so strong credit pays less than half of what fair credit pays for the same coverage. Together those effects can swing your affordable price by tens of thousands of dollars.

FHA or conventional — which lets me afford more house?

FHA loans accept lower credit scores, down payments as small as 3.5%, and higher DTI ratios, so they often approve a larger purchase relative to your income. The trade-off is mortgage insurance: FHA charges an upfront premium plus an annual premium that, with less than 10% down, lasts for the life of the loan, while conventional PMI cancels once you reach enough equity. Compare both modes in this calculator to see which nets you more house for the same payment, then price a specific home in the FHA mortgage calculator.

How much should I put down on a house?

More down payment buys more house for the same monthly payment, since less of the payment goes to interest and — at 20% down on a conventional loan — PMI disappears entirely. But draining every dollar of savings is risky: you still need closing costs, moving expenses, and an emergency fund. This calculator splits your savings between down payment and closing costs so the affordability estimate reflects what you can actually bring to the table.

Term Definitions

Gross Income

Gross income is your total earnings before any deductions such as taxes, insurance premiums, or retirement contributions are taken out. Lenders use this figure to assess your overall financial capacity when you apply for a loan.

Total Monthly Debts

This figure represents the sum of all your regular monthly debt obligations, such as car payments, student loans, credit card bills, and other personal loans. It is a key component in calculating your debt-to-income (DTI) ratio.

Credit Score

A credit score is a number between 300-850 that depicts a consumer's creditworthiness. The higher the score, the better a borrower looks to potential lenders. It is based on credit history: number of open accounts, total levels of debt, and repayment history.

Loan Type

Conventional loans are not insured by the federal government, while FHA loans are. FHA allows as little as 3.5% down and lower credit scores, but charges mortgage insurance set by HUD: 1.75% of the loan upfront (usually financed) plus an annual premium, which lasts for the life of the loan with less than 10% down. Conventional loans charge private mortgage insurance (PMI) only while the loan is above 80% of the home's value.

Savings for Down Payment & Closing Costs

This is the cash you can put toward buying a home. It has to cover the down payment and, unless you finance them, the closing costs (the origination fee plus appraisal, title and other fees). The calculator caps the price so that both fit, and shows the cash needed at closing.

Down Payment

A down payment is the amount of money you pay upfront when purchasing a home, and it is not part of the loan. It can be expressed as a fixed dollar amount or a percentage of the purchase price. A larger down payment can result in a lower interest rate and monthly payment, and may help you avoid private mortgage insurance (PMI).

Debt-to-Income (DTI)

Debt-to-income (DTI) ratio is the percentage of your gross monthly income that goes to debt payments. Lenders look at two: the housing payment alone (the front-end or housing ratio) and housing plus all your other debts (the back-end ratio, which is what "DTI" usually means). The traditional comfortable guideline is 28% and 36%.

Interest Rate

The interest rate is the percentage of the principal that a lender charges for borrowing money. It is typically expressed as an annual rate. A lower interest rate will result in lower monthly payments and less total interest paid over the life of the loan.

Annual Home Insurance

Homeowners insurance is a policy that protects your property against damages from events like fire, theft, or storms. Lenders require this insurance to protect their investment. The cost is typically paid annually or escrowed into your monthly mortgage payment.

Monthly HOA Fees

Homeowners association (HOA) fees are monthly dues paid by homeowners in a condominium or planned community. These fees cover the maintenance of common areas and other shared amenities.

Property Tax

Property taxes are levied by local governments and are typically based on the assessed value of your home. These taxes fund public services like schools, police, and fire departments. They can be paid annually or escrowed as part of your monthly mortgage payment. You can input this as a dollar amount, a percentage of the purchase price, or as a mill rate.

Origination Fee (%)

An origination fee is an upfront fee charged by a lender to process a new loan application. It is typically a percentage of the total loan amount and is sometimes negotiable.

Closing Costs

Closing costs are fees associated with completing a real estate transaction. They typically range from 2% to 5% of the home's purchase price and can include appraisal fees, title insurance, attorney fees, and more. These costs are paid at closing, when the title of the property is transferred to the buyer.

Appraisal Fee

An appraisal fee pays for a professional appraiser to estimate the fair market value of a property. Lenders require an appraisal to ensure that the loan amount is not more than the value of the home.

Title Insurance

Title insurance is a policy that protects both lenders and buyers from financial loss due to defects in a property's title, such as outstanding liens or ownership disputes. It is a one-time fee paid at closing.

Other Fees

This category can include various miscellaneous fees required at closing, such as attorney fees, recording fees (for public records), or survey fees. It's a catch-all for costs not covered by other specific fields.

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