Get an even better estimate with our Debt Optimizer (We can often unlock even more affordability after taking a look at your individual loan-level data)To calculate the amount of home you can afford, simply enter your current income and payments on debts before adding the new property. We’ll help you understand how much house you can afford, or how much money you need to save, or debts you need to reduce, before buying a new house. Our calculator works with real time mortgage rates – as the lenders and costs of financing vary by where you are looking – to give personalized estimates of how much home you can afford in this market. Please note this calculator is for educational purposes only and is not a denial or approval of credit. The accuracy of the home affordability calculation is based on the accuracy and completeness of the information provided by you.
Figure out the maximum amount of house you can afford with the best mortgage rate in today's market, or the money you'd need to buy a home in the future.
Wondering how much home you can afford? Your "home buying power" - is a function of the money you've saved and is also a function of your income and the debts you owe (aka your debt-to-income ratio or DTI). Our calculator – unlike others – takes both of these (downpayment and DTI) into account, and optimizes across live mortgage rates and closing costs for you.
Worried you can’t afford to buy a house? Before you jump to any conclusions, you can enter in a few details into our “how much house can I afford calculator and quickly figure out the house you can afford to buy today, in this market, or you can see how much you could afford, with - e.g. improved credit or lower payments on other debts or greater savings.
Your cost of financing a new home and the amount of mortgage you can afford varies depending on the downpayment you make, your credit score, and your DTI. Mortgage rates also vary by where you are, e.g. mortgages might be more expensive in New York than California. Regardless of where you are, or how much you’ve saved already, reducing the cost of your other debts and improving your credit score can only help improve your home buying power.
Your downpayment - how much money you have saved. This is your equity in the new home. The rest is made up by the mortgage, the amount you borrow to buy the house, or eaten up by closing costs. If you're moving homes, take into account the money you'll get from selling your old home.
Your Credit Score - this is a simple indicator of your past performance on debts that lenders use as an indicator of risk. The riskier loan, the higher price they'll charge.
Your other (non-mortgage) debt or debt-like obligations you'll have after buying the home -these are important as they determine what DTI ratio you'll have after buying the house. Property taxes, and any PMI or mortgage insurance and home insurance: additional monthly payments outside of the payments that pay off the loan. We estimate these payments for you in our calculations.
Your location -mortgage lenders and pricing changes by market, so you need this to figure out what you need to buy a house in a certain location.
We then shop across any prices we can find, whether they’re advertised prices, or prices we get directly from lenders in our marketplace. We also block lenders that don’t live up to their prices.
To maximize the amount of home you can afford, it’s likely that you’ll be looking at a mortgage term of 30 years as that will have lower monthly payments than, say a 15 year mortgage, so as a first pass, you can simplify things and just look at 30 year fixed rate mortgages.
Don’t forget the price of a mortgage is more than just the interest rate. Closing costs take away from the hard earned money you’ve saved for a downpayment on that home! We have a guide on the price of a mortgage for you. The lower the price of the mortgage, the more likely you can afford a home or the less money you need to save before buying it. And the more likely you can say yes to “can I afford to buy this house on my salary of $X if I’ve saved $Y”.
After you’ve figured out the maximum possible house you _could_ buy, you’ll need to ask yourself how much you’re _comfortable_ buying. Lenders might be willing to lend more than you’re comfortable borrowing. People used to give rules of thumbs like “only spend a quarter of your paycheck” (that would be a 25% rule), but then as house prices shot up those rules of thumbs kept on adjusting upwards. And if you can afford a house today, you decide the amount of time you want to save up before buying a home.
Bottom-line: there should be a personal, emotional component that no calculator can provide you the answer to “how much house can I afford?”. The only person who can answer that question is you. We’re here just to give you the data-driven answer!
Veterans qualify for VA loans. VA loans can help avoid any downpayment whatsoever, so if you’re a veteran, thank you for your service and congrats, you should check those loans out.
If you aren’t a veteran, FHA loans require lower downpayments in return for higher monthly payments (with mortgage insurance), so if downpayment is the limiting factor, these often help.