- Enter your annual income.
- Enter your current monthly debt.
- Enter your down payment.
- Enter a state.
Please fix the following items to continue:
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Annual income before taxes
Enter your annual income, before taxes. This is also known as your gross income. You can receive this as money, goods, property or services.
Enter your annual income.
Monthly debt
Your monthly debt can include credit card payments, car payments, student loans, alimony and child support payments, any home payments (rent or mortgage) other than the new mortgage you’re seeking, rental property maintenance, and other personal loans with periodic payments. Don’t include everyday expenses like groceries.
Enter your current monthly debt.
Down payment
This is the cash you pay up front when you buy a home. The larger your down payment, the less you’ll need to borrow and pay back in interest.
Enter your down payment.
State
Choose the state where you’re thinking of buying a home.
Property tax
Property tax is calculated by your local government based on the value of the property you own, including the land.
Homeowners insurance
This is a type of property insurance that often covers interior and exterior damages, personal assets, or injuries that occur while on the property. It’s often based on your home’s price.
Homeowners association (HOA) fees
HOA fees are monthly dues that condo owners and homeowners in some single-family neighborhoods pay.
Interest rate
This is the amount of money your lender charges you for using their money. It’s shown as a percentage of your principal loan amount.
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Affordability breakdown
Affordability breakdown
These ranges are based on what your debt-to-income ratio (or DTI) would be.
Affordable In this range, with a DTI from 0% to 36%, you’d be able to pay your monthly bills and still have money left for food and entertainment.
Stretch In this range, with a DTI from 36.1% to 43%, you’d likely be able to afford your monthly housing payments but it may take away from your other expenses or affect your savings.
Aggressive In this range, with a DTI from 43.1% to 50%, you may be likely to miss payments if any unexpected expense occurs.
Affordable
Recommended
Stretch
Aggressive
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Understand your home affordability calculator results.
Once you enter your income, debt, down payment amount and location, this calculator estimates an affordable purchase price and monthly payment. It factors in interest rates and different fees and prices in your desired area.
Your results also display home-price ranges that would be affordable for your budget, a stretch for your budget and aggressive for your budget. These ranges are based on your debt-to-income ratio (DTI) and assume that your total monthly debt obligations are 50% or lower.
What factors determine home affordability?
Here are some questions and answers that can help you decide “how much mortgage can I qualify for?”.
Why does credit score matter?
Lenders use your credit score and credit report to see what kind of borrower you are. The higher your credit score, the better your chances are for loan approval and for better interest rates. Learn more about credit’s impact on homebuying.
What is debt to income ratio (DTI)?
DTI compares the amount of debt you have to your overall income. Ideally this percentage is low, around 36% or under. Get more information about DTI here. A good rule to follow for DTI is the 28/36 rule.
What is the 28/36 rule?
The 28/36 rule states that you shouldn’t spend more than 28% of your annual gross (or pre-tax) income on housing costs. It also states that your total debt – including housing – shouldn’t be more than 36% of your annual income. If you follow the 28/36 rule as you consider how much to spend on a home, you’ll end up in the affordable price range.
Does down payment amount matter?
A down payment is the cash you pay up front when you buy a home. The larger your down payment, the less you’ll need to borrow and pay in interest – but you don’t have to have 20% to put down. Here are some more down payment basics.
What else can affect affordability?
Keep in mind that closing costs and other additional taxes and fees can add up. Contact a mortgage loan officer to learn more about these important parts of the homebuying process.
You can also get answers to some basic home affordability questions, or check out our access to homeownership guide for more affordability resources.
More tools and calculators
Today’s mortgage rates
Interest rates vary depending on the type of mortgage you choose. See the differences and how they can impact your monthly payment.
Monthly payment calculator
Your monthly mortgage payment depends on a number of factors, like purchase price, down payment, interest rate, loan term, property taxes and insurance.
Get answers to frequently asked questions about mortgage affordability.
To determine an affordable mortgage for you, you’ll need to consider how much you earn each month versus how much money you pay out every month (this is your debt to income ratio, or DTI).
Here are some other factors that can affect the affordability of a mortgage:
- Your down payment amount
- What type of home loan you take out
- How long you plan to pay off your mortgage
- Where you want to live
- Your credit score
A standard rule for lenders is that 28% or less of your monthly gross income should go toward your monthly mortgage payment.
For a basic estimate of what you may be able to borrow, get prequalified. Prequalification is simple and won’t affect your credit score.
The average cost of homeowners insurance varies by state. Along with location, the price of homeowners insurance can also depend on:
- Which company you choose
- Your deductible and coverage limits
- Your credit history
- Your home: its age, how it’s built, how it’s maintained and renovated, if there are special features like a pool, etc.
- Where you live: proximity to emergency services, neighborhood crime rate, etc.
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