Mortgage Affordability Calculator

How to Use This Mortgage Affordability Calculator

To calculate how much house you can afford, input the following information:

1. Loan term: Use the dropdown to select a loan term of 10, 15, 20, 25 or 30 years.
2. Interest rate: Enter the estimated mortgage interest rate for the type of mortgage you're considering. Be sure to use the interest rate, not the annual percentage rate (APR).
3. Down payment: Enter your estimated down payment.
4. Annual income: Enter your pretax annual income.
5. Monthly expenses: Input the total of your recurring monthly debt payments, including auto loans, student loans, child support, personal loans and the minimum payments on your credit cards.
6. Annual property tax: Enter the estimated annual property tax for the home you plan to buy. You can typically get estimated property taxes from real estate websites or your real estate agent.
7. Annual homeowners insurance: Enter the estimated annual homeowners insurance premium for the home you plan to buy. Lenders usually require home insurance when you have a mortgage. You can generally get estimated premiums from your real estate agent, real estate listings, insurance brokers or insurance company websites.
8. Monthly HOA: Enter any monthly homeowners association (HOA) dues for the home you plan to buy. This information is usually available from property listings or your real estate agent.

When you click the Calculate button, you'll see these results:

• Total home price: The maximum asking price you can afford
• Total loan amount: The amount you'll need to borrow to purchase a home at that price
• Monthly mortgage payment: Your monthly payment, including the principal balance and interest, for a home at that price
• Monthly housing costs: A breakout of non-mortgage housing costs, including taxes, insurance and HOA dues
• Monthly PMI: Private mortgage insurance (PMI) is generally required if you get a conventional mortgage with a down payment of less than 20% of the home's purchase price
• Total monthly payment: Your monthly housing payment, including principal, interest, taxes, insurance (PITI) and any HOA dues
• Total mortgage paid: The total amount of principal and interest you'll pay over the life of the loan
• Total interest paid: Breaks out the total amount of interest you'll pay over the life of the loan
• Total PMI paid: The total amount of PMI you'll pay before it is removed

Learn more: Complete Costs of Buying a Home

Compare mortgage rates

Check today’s rates to find the best loan offers. Staying updated on current rates helps you secure a competitive mortgage and save more over time.

Factors That Affect How Much House You Can Afford

How much house you can afford depends on your income, debt level, credit score and other factors.

• Income: Because mortgage lenders often limit your monthly payment to 28% of your gross monthly income, a higher income can help you qualify for a bigger mortgage. Lenders also look for evidence of steady employment as a sign that you'll be able to pay back your loan.
• Debt-to-income (DTI) ratio: Lenders typically require you to have a back-end DTI ratio of no more than 43% for a conventional mortgage. This ratio compares your gross monthly income to your monthly debt payments, including housing costs. A lower DTI means less of your income goes toward mortgage payments.
• Down payment: A larger down payment can help qualify you for a lower interest rate and a wider range of mortgage types. Making a down payment of 20% or more means you won't need PMI, which could help you afford a more expensive home.
• Savings: Assets such as savings and investment accounts can help you make a bigger down payment, which may allow you to borrow more. Savings also provide emergency funds for making your mortgage payments despite financial setbacks such as job loss.
• Loan term: A longer loan term generally means paying more total interest, but it can also reduce your monthly payment, which could help you qualify for a larger loan.
• Credit score: Lenders view your credit score as an indicator of whether you'll pay your mortgage on time. Conventional mortgages typically require a credit score of at least 620; however, higher credit scores may qualify you for a bigger loan and lower interest rate.
• Mortgage interest rates: Lower interest rates mean a lower monthly payment, which may enable you to borrow more money. Your interest rate depends partly on your credit score, but market conditions, your lender, your location and the type of mortgage you get are also important factors.
• Your financial goals: Just because you can qualify for a big mortgage doesn't mean it's right for you. An affordable mortgage is one that leaves room in your budget for other financial objectives, such as saving for retirement, investing or building your children's college fund.

Learn more: What Factors Do Mortgage Lenders Consider?

How to Get a Mortgage

Follow these steps to get a mortgage:

1. Check your credit. Before applying for a mortgage, review your credit report and score. You can check your Experian credit report and FICO^® Score^Θ for free from Experian and get free credit reports from TransUnion and Equifax at AnnualCreditReport.com. If your credit reports contain information you believe is inaccurate, you have the right to file a dispute with the appropriate credit reporting agency.
2. Get your financial documents in order. Gather the required documents, which typically include proof of income (W-2 forms, pay stubs and two years worth of tax returns); statements from your checking, savings, brokerage and retirement accounts; and current loan statements. Also decide how big a down payment you can make.
3. Choose a lender. Compare different lenders' loan amounts, fees, closing costs, mortgage options and customer reviews to find the right lender. Working with a mortgage broker can help you sort through the options to find the lender and type of mortgage that suits your needs.
4. Get preapproved. Complete a mortgage preapproval application and get a preapproval letter, which estimates the loan amount and terms the lender believes you can qualify for. Preapproval involves a hard credit check, which can temporarily ding your credit score; to minimize negative impacts, limit all your preapproval applications to a two-week period.
5. Look for a home and make an offer. A preapproval letter marks you as a serious buyer, which can give you an edge in a competitive market.
6. Close on your mortgage. Once the seller accepts your offer, your lender will review your supporting documents and underwrite the loan, which typically takes a month or two. You'll pay your down payment and any closing costs, supply proof of homeowners insurance and sign the loan documents.

Tip: Mortgage preapproval doesn't guarantee final approval. Avoid applying for new credit accounts, changing jobs or taking other actions that could affect your finances until after you close on the loan.

Learn more: The Complete Guide on How to Get a Mortgage

Get a Mortgage That Fits Your Budget

Regardless of the loan amount banks are willing to offer, determining how much mortgage you can afford is ultimately up to you. Aim for a mortgage payment that fits your budget, giving you space to achieve your other financial goals.

Taking steps to improve your credit before applying for a mortgage could help you qualify for a lower interest rate, reducing your mortgage costs. Signing up for free credit monitoring from Experian is a convenient way to keep tabs on your progress. You'll get access to your FICO^® Score and receive alerts of important changes to your credit report that could affect your ability to get a loan.