How much house can I afford?

This is what you can afford in
$437,714
Your monthly payment
$2,500
Affordable
Stretching
Aggressive
Monthly payment
$2,500

Mortgage payment

$1,707

Property taxes

Homeowners association fee

Homeowners insurance

Down payment & closing costs
$98,894

Down payment

$87,543

Total closing costs

$11,351

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Your monthly payment
$2,500
Affordable
Stretching
Aggressive

Interest rate by credit score

Poor
Average
690
Good
719
Excellent

Likely rate: 4.172% Edit rate

Down payment & closing costs

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How we calculate affordability

Total debt-to-income (DTI) ratio

FHA vs. conventional loan

How we calculate affordability

To calculate how much house you can afford, we take into account a few primary items, such as your household income, monthly debts (for example, car loan and student loan payments) and the amount of available savings for a down payment. That said, as a home buyer, it’s important to have a certain level of comfort in understanding your monthly mortgage payments. While your household income and monthly debts may be relatively stable, your overall savings and how much you wish to allocate toward your home can vary depending on how much you want to set aside for a rainy day or how much you want to set aside for a future expenditure.

A good affordability rule of thumb is to have three months of your housing payments, including your monthly expenses, in reserve. This will give you an additional buffer for covering your mortgage payment in case there is some unexpected event.

To calculate how much house you can afford, we take into account a few primary items, such as your household income, monthly debts (for example, car loan and student loan payments) and the amount of available savings for a down payment. That said, as a home buyer, it’s important to have a certain level of comfort in understanding your monthly mortg...

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Total debt-to-income (DTI) ratio

An important metric that your bank uses to calculate the amount of mortgage you can borrow is the DTI ratio, or simply put, the ratio of your total monthly debts (for example, your mortgage payments including property and tax payments) to your monthly pre-tax income. Depending on your profile and lending resource, you may be qualified at a higher ratio closer to 43%. We recommend that your total monthly spend for housing and debts should not exceed 36% of your monthly income in order to provide you with a safe cushion.

An important metric that your bank uses to calculate the amount of mortgage you can borrow is the DTI ratio, or simply put, the ratio of your total monthly debts (for example, your mortgage payments including property and tax payments) to your monthly pre-tax income. Depending on your profile and lending resource, you may be qualified at a higher r...

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FHA vs. conventional loan

In considering your available savings for a down payment there are specific loan types to consider. We’ve made the assumption that if you have at least a 20% down payment, you would be better fit for a conventional loan and anything less (down to a minimum of 3.5%) would be considered for a FHA loan. For more on the types of mortgage loans, see Selecting the Right Mortgage.

In considering your available savings for a down payment there are specific loan types to consider. We’ve made the assumption that if you have at least a 20% down payment, you would be better fit for a conventional loan and anything less (down to a minimum of 3.5%) would be considered for a FHA loan. For more on the types of mortgage loans, see Sel...

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Home Affordability 101

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 monthly income on home-related costs and 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.