House Affordability Calculator
Use this calculator to determine how much house you can afford based on your income, monthly debts, down payment, and other factors. The calculator provides estimates based on standard affordability ratios and allows you to adjust assumptions about interest rates and loan terms.
Affordability Summary
Enter your financial details and click "Calculate" to see how much house you can afford.
How Much House Can I Afford?
Determining how much house you can afford involves several factors, including your income, existing debts, down payment amount, and current mortgage rates. This calculator helps you estimate your home buying budget based on standard affordability guidelines.
Key Factors in Home Affordability
- Annual Income: Your gross (pre-tax) annual income from all sources
- Monthly Debts: Existing loan payments (car loans, student loans, credit cards, etc.)
- Down Payment: The amount you can pay upfront (typically 5-20% of home price)
- Interest Rate: Current mortgage rates affect your monthly payment
- Loan Term: The length of your mortgage (15, 20, or 30 years)
- Property Taxes & Insurance: Ongoing costs of homeownership
Affordability Guidelines
Lenders typically use two ratios to determine how much you can borrow:
- Front-End Ratio (28% rule): Your mortgage payment (including taxes and insurance) should not exceed 28% of your gross monthly income.
- Back-End Ratio (36% rule): Your total debt payments (including mortgage) should not exceed 36% of your gross monthly income.
Tips for Improving Your Home Affordability
- Save for a larger down payment to reduce your loan amount
- Pay down existing debts to improve your debt-to-income ratio
- Consider a longer loan term (30 years vs. 15 years) for lower monthly payments
- Look for homes in areas with lower property taxes
- Improve your credit score to qualify for better interest rates