How much house can i afford?

$146,963.65

Debt-to-income ratio (DTI)

36%
|
Affordable

Your debt-to-income ratio (DTI) would be 36%, meaning 36% of your pretax income would go toward mortgage and other debts.

Monthly Payment

$800.20

Down Payment

34.02%


Homes within this budget
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Basic options

Before taxes. Include any co-buyer’s income

Obligations like loan and debt payments or alimony, but not costs like groceries or utilities.

Cash you can pay when you close

For personalized recommendation.

Interest rate by credit

350629
630689
690719
720850

5.125%

Interest rate

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Advanced options

Most buyers chose 30- or 15-year loans, but other types (like 5/1 ARM) exist.

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/month

Mandatory fees paid to a homeowners association, excluding special assessments or fines.

/month

Additional outlays not categorized under primary expenses, excluding one-time or irregular costs.

/month

Regular premiums paid for property coverage, excluding additional riders or one-time fees.

/year

Recurring payments made towards local government taxation on real estate, excluding any late fees or adjustments.

0%

Regular premiums paid for private mortgage insurance, not included when down payment is equal or greater than 20% of the property.

Private mortgage insurance (PMI)

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FAQS

How we calculate how much house you can afford?

Our home affordability calculator estimates how much home you can afford by considering where you live, what your annual income is, how much you have saved for a down payment, and what your monthly debts or spending looks like. This estimate will give you a brief overview of what you can afford when considering buying a house.Go one step further by applying some of the advanced filters for a more precise picture of what you can afford for a future residence by including the costs associated with homeownership. The advanced options include things like monthly homeowners insurance, mortgage interest rate, private mortgage insurance (when applicable), loan type, and the property tax rate. The more variables you enter into the home affordability calculator will result in a closer approximation of how much house you can afford.

How does your debt-to-income ratio impact affordability?

An important metric that your mortgage lender uses to calculate the amount of money you can borrow is the DTI ratio — comparing your total monthly debts (for example, your mortgage payments, including insurance and property tax payments) to your monthly pre-tax income. Depending on your credit score, you may be qualified at a higher ratio, but generally, housing expenses shouldn’t exceed 28% of your monthly income. For example, if your monthly mortgage payment, with taxes and insurance, is $1,260 a month and you have a monthly income of $4,500 before taxes, your DTI is 28%. (1260 / 4500 = 0.28) You can also reverse the process to find what your housing budget should be by multiplying your income by 0.28. In the above example, that would allow a mortgage payment of $1,260 to achieve a 28% DTI. (4500 X 0.28 = 1,260)

How much house can I afford on my salary?

Want a quick way to determine how much house you can afford on a $40,000 household income? $60,000? $100,000 or more? Use our mortgage calculator mortgage calculator to examine different scenarios. By inputting a home price, the down payment you expect to make and an assumed mortgage rate, you can see how much monthly or annual income you would need — and even how much a lender might qualify you to borrow. That calculator also answers the question from another angle: What salary do I need to buy a $300,000 house? Or a $400,000 house? It’s another way to get comfortable with the home buying power you may already have, or want to gain.

How to calculate annual income for your household?

In order to determine how much mortgage you can afford to pay each month, start by looking at how much you earn each year before taxes. Consider all your earnings for the year, which could include salary, wages, tips, commission, etc.If you have a spouse or a partner that has an income which will also contribute to the monthly mortgage, make sure to include that as well into your gross annual income for your household. Then take your annual income and divide by 12 to determine your monthly income.

The 28/36 rule - what it is and how it works.

To calculate 'how much house can I afford,' a good rule of thumb is using the 28/36 rule, which states that you shouldn’t spend more than 28% of your gross, or pre-tax, monthly income on home-related costs and no more than 36% on total debts, including your mortgage, credit cards and other loans, like auto and student loans. Example: If you earn $5,500 a month and have $500 in existing debt payments, your monthly mortgage payment for your house shouldn’t exceed $1,480. The 28/36 rule is a broadly accepted starting point for determining home affordability, but you’ll still want to take your entire financial situation into account when considering how much house you can afford.

What factors help determine 'how much house can I afford?'

While the personalized rates give you a good benchmark, market changes can affect them. If you come across a rate that seems favorable, acting swiftly is advised. To ensure you secure that rate, you'll need to lock it in with the lender, often by initiating the loan application process.

Home affordability begins with your mortgage rate

You will probably notice that any home affordability calculation includes an estimate of the mortgage interest rate you will be charged. Lenders will determine if you qualify for a loan based on four major factors:

  1. Your debt-to-income ratio.
  2. Your history of paying bills on time.
  3. Proof of steady income.
  4. The amount of down payment you’ve saved, along with additional cash reserves for closing costs and other expenses you’ll incur when moving into a new home.

If lenders determine you are mortgage-worthy, they will then price your loan. That means determining the interest rate you will be charged. Your credit score largely determines the mortgage rate you’ll get. Naturally, the lower your interest rate, the lower your monthly payment will be.

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