House Affordability Calculator
Determine how much house you can afford based on your income or budget
Based on Annual Income
Based on Monthly Budget
House Affordability Calculator
There are two House Affordability Calculators that can be used to estimate an affordable purchase amount for a house based on either household income-to-debt estimates or fixed monthly budgets.
The first calculator estimates affordability based on income and debt, while the second calculates the maximum purchase price based on a fixed monthly housing budget.
These calculators are useful for prospective home buyers to determine how much house they can afford before beginning their search.
How the Calculator Works
The calculator uses standard mortgage formulas to determine affordability based on your inputs:
Income-Based Calculation
This calculation uses your annual income, monthly debts, and selected debt-to-income ratio to determine how much you can afford to spend on housing each month, then calculates the maximum home price based on that monthly payment.
Budget-Based Calculation
This calculation starts with your desired monthly housing budget and works backward to determine the maximum home purchase price that would result in that monthly payment, considering all housing costs.
Key Factors Considered
- Loan amount and term
- Interest rate
- Down payment percentage
- Property taxes
- Homeowners insurance
- HOA fees (if applicable)
- Private Mortgage Insurance (PMI) if down payment is less than 20%
Tips for Improving Affordability
If you can't immediately afford the house you want, consider these strategies:
Reduce Other Debts
Paying down credit cards, car loans, or student loans can improve your debt-to-income ratio.
Increase Your Down Payment
Saving for a larger down payment reduces your loan amount and may eliminate PMI requirements.
Improve Your Credit Score
A higher credit score can qualify you for better interest rates, lowering your monthly payment.
Consider Different Loan Terms
A 15-year mortgage will have higher payments but less interest over time. A 30-year mortgage spreads payments out longer.
Look for Less Expensive Areas
Property taxes and insurance rates vary by location. More affordable areas might fit your budget better.