House Affordability Calculator

Calculate how much house you can afford based on your income, existing debt, and down payment. Get detailed affordability analysis with debt-to-income ratios and comprehensive monthly payment breakdowns.

House Affordability Calculator

Calculate how much house you can afford based on income, debt, and loan terms for United States

Country

Annual Income (USD)

Monthly Debt Payments (USD)

Down Payment (%)

Interest Rate (%)Current: 7.12%

Loan Term

Property Tax Rate (%)

Annual Home Insurance (USD)

Monthly HOA Fees (USD)

How Much House Can You Afford?

Quick Answer: Most financial experts recommend that your housing costs should not exceed 28% of your gross monthly income. For example, with an $80,000 annual income, you can afford about $1,867 in monthly housing costs.

Your actual affordability depends on your debt-to-income ratio, down payment amount, interest rates, and local property taxes. Use our calculator to get a personalized assessment based on your specific financial situation.

Home Affordability Rules & Guidelines

Standard guidelines used by lenders and financial advisors

The 28/36 Rule

28% Housing Rule

No more than 28% of gross monthly income should go to housing costs (PITI)

PITI = Principal, Interest, Taxes, Insurance

36% Total Debt Rule

No more than 36% of gross monthly income should go to total debt payments

Includes housing, credit cards, auto loans, student loans

Alternative Guidelines

Conservative Approach25% of gross income

Moderate Approach28% of gross income

Aggressive Approach31% of gross income

Maximum (FHA)43% total debt-to-income

Down Payment Options & Impact

How different down payment amounts affect your purchase

Down Payment	Loan Type	PMI Required	Benefits	Considerations
3-3.5%	FHA, Conventional	Yes	Lower cash requirement	Higher monthly payments
5-10%	Conventional	Yes	Moderate cash requirement	PMI until 20% equity
20%	Conventional	No	No PMI, lower rates	Higher cash requirement
25%+	Jumbo, Conventional	No	Best rates, strong offers	Significant cash needed

Income Requirements by Home Price

Minimum income needed for different home prices (with 20% down, 7% rate)

$200,000

$57,000

Annual income needed

$350,000

$100,000

Annual income needed

$500,000

$143,000

Annual income needed

$750,000

$214,000

Annual income needed

*Assumes 20% down payment, 7% interest rate, 1.2% property tax, $1,200 annual insurance, no HOA, using 28% housing ratio

Mortgage Pre-Approval Process

Steps to get pre-approved for a mortgage

Required Documents

• Pay stubs (last 2 months)
• Tax returns (last 2 years)
• Bank statements (last 2-3 months)
• Employment verification letter
• Investment account statements
• Debt statements (credit cards, loans)
• ID and Social Security card

Pre-Approval Benefits

• Know your exact budget before shopping
• Strengthen offers in competitive markets
• Identify potential issues early
• Lock in interest rates (sometimes)
• Faster closing process
• Shows sellers you're serious
• Avoid disappointment from unaffordable homes

Frequently Asked Questions

Common questions about home affordability

How much house can I afford with my salary?

Generally, you can afford a house that costs 2.5 to 3 times your annual income, assuming a 20% down payment and moderate debt. However, the exact amount depends on your debt-to-income ratio, down payment, interest rates, and other monthly obligations.

What is the 28/36 rule for home affordability?

The 28/36 rule states that no more than 28% of your gross monthly income should go to housing costs (PITI: Principal, Interest, Taxes, Insurance), and no more than 36% should go to total debt payments including housing, credit cards, car loans, and other debts.

What's included in my monthly housing payment?

Your monthly housing payment typically includes Principal and Interest (P&I), Property Taxes, Homeowners Insurance, and potentially Private Mortgage Insurance (PMI) if you put down less than 20%. Some areas also have HOA fees that should be included.

How does my down payment affect affordability?

A larger down payment reduces your loan amount, lowering monthly payments and allowing you to afford a more expensive home. Additionally, putting down 20% eliminates PMI, further reducing monthly costs. However, don't drain all savings for a down payment.

What debt-to-income ratio do I need to qualify for a mortgage?

Most conventional loans require a debt-to-income ratio below 36%, though some allow up to 43%. FHA loans may accept ratios up to 57% in some cases. Lower ratios generally qualify for better interest rates and loan terms.

Should I get pre-approved before house hunting?

Yes, pre-approval shows sellers you're serious and financially qualified. It also gives you a realistic budget and can strengthen your offer in competitive markets. Pre-approval letters are typically valid for 60-90 days.

How do I improve my home affordability?

Increase affordability by: paying down existing debt, increasing income, saving a larger down payment, improving credit score for better rates, considering longer loan terms, or looking in areas with lower property taxes and home prices.

What other costs should I budget for when buying a home?

Beyond the down payment and monthly payment, budget for: closing costs (2-5% of home price), moving expenses, immediate repairs/improvements, higher utility bills, homeowners insurance, property taxes, and ongoing maintenance (1-3% of home value annually).