What other costs should I budget for besides the down payment?

You should also budget for closing costs, which typically range from 2% to 5% of the home's purchase price. These include fees for the appraisal, title search, loan origination, and more. You'll also need cash for moving expenses and potential initial repairs or furnishings.

Home Affordability Calculator

Currency

Gross Annual Income

Total Monthly Debts

Down Payment Saved

Interest Rate

Loan Term (Years)

Max Debt-to-Income (DTI)

Annual Property Tax Rate

Annual Insurance Rate

Your Estimated Home Budget

Estimated Monthly Payment

Affordable Loan Amount

Affordable Home Price

The First Step to Your First Home

Before you start browsing listings and falling in love with houses, the most important first step is to know your budget. "How much house can I afford?" is the question that grounds your search in reality and prevents future financial stress. This isn't just about what a bank might lend you; it's about what you can comfortably pay each month.

This calculator works just like a lender would. It starts with your income, subtracts your existing debts (like car payments and student loans), and then uses a key metric called the **Debt-to-Income (DTI) ratio** to determine the maximum monthly housing payment you can sustain. From there, it calculates a realistic **Affordable Home Price**, giving you a powerful number to guide your search for the perfect home.

Plan Your Home Buying Journey

Mortgage Calculator: Once you have a target price, use this to see a full amortization schedule.
Rent vs. Buy Calculator: Analyze the financial pros and cons of renting versus buying a home in your area.
Mortgage Payoff Calculator: See how making extra payments can shorten your loan term and save you thousands in interest.

Frequently Asked Questions (FAQ)

What is Debt-to-Income (DTI) Ratio?

Debt-to-Income (DTI) ratio compares how much you owe each month to how much you earn. Specifically, it’s the percentage of your gross monthly income (before taxes) that goes to pay your rent, mortgage, car payments, and other debts. Lenders use it to measure your ability to manage monthly payments and repay debts.

What is the 28/36 rule?

The 28/36 rule is a common DTI guideline used by lenders. It states that you should spend no more than **28%** of your gross monthly income on housing costs (your PITI payment) and no more than **36%** of your gross monthly income on total debt (housing + other debts). Our calculator defaults to the 36% "back-end" ratio, which is the most important one for loan qualification.

Does this calculator include closing costs?

No, this calculator focuses on the purchase price and ongoing monthly payments. You should budget separately for closing costs, which are fees paid at the end of the transaction and typically amount to 2% to 5% of the home's price. Your down payment is also separate from closing costs.