Home Affordability Calculator: How Much House Can I Afford?

Use our home affordability calculator to find out how much house you can afford before you start shopping for one. It’s a smart way to calibrate your expectations—and save you from financial stress down the road. No matter how nice your house is, being house poor is never a fun life.

We’ll also cover what factors go into figuring out your ability to afford a home—including mortgage rates and your salary—and what levers you can pull to increase your buying power.

Home affordability calculator

How to use our home affordability calculator

Enter your information in the fields above to get an estimate of your home buying power, which is based on your monthly mortgage payments, debt-to-income (DTI) ratio, and upfront costs.

Our home affordability calculator works based on the 28/36 rule, which states that homebuyers shouldn’t spend more than 28% of their gross monthly income on housing costs and no more than 36% on total debts. The 28/36 rule is widely used by mortgage lenders and it’s essential to understand when you apply to prequalify for a mortgage.

You can still qualify for a loan if your total debts are up to around 43% of your gross income, although you may not get the best interest rates.

Here’s a breakdown of what each input field of the calculator means. 

• Annual income: This is your gross annual salary before taxes. If you have a co-buyer, enter their salary too. Your annual income is one of the main factors lenders consider when determining your ability to afford a mortgage, although it’s not the only financial consideration.
• Other income: Add any supplemental income you or your co-buyer may have, such as rental income, freelance work, or earnings from a side business.
• Location: Entering your city and state is important because property tax rates and insurance premiums vary substantially by location, directly impacting home affordability.
• Loan term: A 30-year mortgage is the most common option for homebuyers. However, you can also select a 15-year mortgage. Your loan term will have a significant impact on your principal and interest costs, with shorter terms leading to higher monthly principal payments but lower total interest paid over time.
• Down payment: Building a down payment is one of the most important steps to buying a home. Most homebuyers pay between 3% and 20%, with first-time buyers putting down 10% on average.[1] Note that if your down payment is under 20%, you’ll likely have to pay private mortgage insurance (PMI), which the calculator assumes is 1.1% of your home price annually.
• Monthly debt: This is your total monthly payments for non-housing debts, such as credit cards, car loans, student debt, spousal support, and child support.
• Property tax: The calculator uses the national average effective property tax rate. However, property tax rates vary substantially, so for a more accurate estimate research and input the current rate for your state, county, or municipality.
• Homeowner's insurance: We’ve prefilled the calculator with the national average homeowner’s insurance cost. Actual costs vary depending on location, home value, and other factors, so for a more accurate estimate find out what your insurance cost will likely be and input it above.
• HOA fees: If your new property has HOA fees, enter them here. Not all homes are part of a homeowners’ association, so leave this field blank if it doesn’t apply to you.
• Credit score: Enter your credit score here. Higher credit scores qualify for lower interest rates, which will have a big impact on affordability. If you have poor or moderate credit, consider taking some months before purchasing a home to improve your credit score, such as by making monthly payments and lowering your credit card utilization.

Other factors that impact affordability

Our home affordability calculator is a good starting point for determining how much house you can or cannot afford. However, there are other factors that go beyond the calculator that will affect your ability to afford a home.

• Employment history: Many lenders prefer borrowers who have at least two years of stable employment, either in the same field or with the same employer. Consistent income history shows an ability to pay back debts and reduces risk for lenders.
• Credit history red flags: Even if you have a good credit score, there could be issues on your credit report that may make lenders hesitant to lend to you. These can include bankruptcies, foreclosures, and multiple late payments. 
• Defaulted loans: Defaulting on past loans, such as auto loans or student loans, is a big concern for lenders. If you have any loan defaults, you may have to explain to your lender the circumstances around the defaults and why you’re a lower risk today.
• Tax liens or judgments: Tax liens don’t appear on credit reports, but they can still prevent you from qualifying for a mortgage.[2] Make sure all tax liens or judgments are resolved before applying for a home loan.
• Recent large purchases: Making a recent large purchase, such as financing a new car or applying for several credit cards, right before applying for a mortgage can put your approval at risk. While these purchases may not show up on your credit report immediately, they will change your DTI ratio.
• Cash reserves: Some lenders require at least 2 to 6 months of mortgage payments in your savings. This is especially the case if there are other issues with your application, such as an unstable employment history or a past loan default.

How mortgage rates impact affordability

Interest rates have a major impact on your ability to afford a home. For example, if you have a $400,000 loan, a 5% interest rate will cost you approximately $2,147 in principal and interest per month. But a 7% interest rate will increase your monthly payments to around $2,661, a difference of over $500 per month.

Plus, interest rates fluctuate based on Federal Reserve policy and broader economic conditions. Currently, the average U.S. mortgage rate is 6.26%, but it was 6.84% one year ago and 2.72% five years ago. When choosing a mortgage lender, you’ll need to weigh not only their current rates, but for how long you can lock in those rates for.

If you have a variable rate mortgage, you’ll be exposed to fluctuation in rates. That can mean you’ll enjoy a deal when rates are low, but you may be in for a shock if they suddenly go up.

A fixed-rate mortgage will lock in your interest rate for a set amount of time, often 15 or 30 years. While a fixed-rate mortgage provides more stability, you could potentially be stuck with a higher interest rate unless you choose to refinance.

How much house can I afford on my salary?

Home affordability usually improves the higher your salary is. However, other considerations, such as your DTI ratio and credit history, will also impact affordability.

The chart below gives you a general idea of how much house you can afford at different salary levels using the 28/36 rule. The chart assumes a 6% interest rate, minimal debt, and a 20% downpayment and only covers principal and interest (not taxes or insurance).

The amount of home you’ll be able to afford will vary based on factors beyond your income. Your location, financial situation, and the current economic climate will all have a big impact on your ability to afford a home.

• How Much House Can I Afford With a $70K Salary?
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• How Much House Can I Afford With a $140K Salary?
• How Much House Can I Afford With a $250K Salary?

If you’re considering buying a house, it’s important to consult with trusted real estate professionals, such as a realtor and financial advisor. That way you’ll have the advice you need to make the decisions that fit your budget and homeownership goals.

FAQ about home affordability