Mortgage Calculator

how much house can I afford

How Much House Can I Afford?

Use the Home Affordability Calculator to find a home within your budget.

Your mortgage payment will include four components called PITIprincipalinteresttaxes and insurance. Many homebuyers know about these costs, but what they’re not prepared for are the hidden costs of homeownership. These include homeowners association fees, private mortgage insurance, routine maintenance, larger utility bills and major repairs.

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mortgage calculator

Estimate your monthly mortgage payment. You can input a different home price, down payment, loan term and interest rate to see how your monthly payment changes.

A mortgage calculator is a springboard to helping you estimate your monthly mortgage payment and understand what it includes. Your next step after playing with the numbers: getting pre-approved by a mortgage lender.

Mortgage Calculator Help

Using a mortgage calculator can help you quickly and accurately predict your monthly mortgage payment with just a few pieces of information.

To use the calculator above, you’ll need to know the following information:

Home price – This is the total amount you expect to pay for a home, also called sales price.

Down payment – A down payment is a percentage of your home’s purchase price that you pay up front when you close your home loan. (Typically, 20% down lets you avoid mortgage insurance.)

The minimum down payment required for a conventional loan is 3%. And the minimum down payment for an FHA loan is now 3%. Some special loan programs and down payment assistance programs allow for 0% down payments.

Interest rate – The interest rate is the amount of interest the lender will charge you for the loan (not including any of the administrative costs). 

Amortization period – This refers to the time period it will take to repay a mortgage in full. Because mortgage lenders charge interest on mortgage loans, the longer it takes to pay off the mortgage, the more interest one pays. The average amortization period is 30 years or 360 months.

Why it’s smart to follow the 28/36% rule

Maxing out your income to purchase your dream house is a one-way ticket to financial disaster. It’s important to make sure you have enough cushion in your budget for emergencies and unexpected expenses, not to mention retirement.

To determine how much house you can afford, most financial advisers agree that people should spend no more than 28 percent of their gross monthly income on housing expenses and no more than 36 percent on total debt — that includes housing as well as things like student loans, car expenses, and credit card payments.

The 28/36 percent rule is the tried-and-true home affordability rule that establishes a baseline for what you can afford to pay every month.

– To calculate how much 28 percent of your income is, simply multiply 28 by your monthly income.
– If your monthly income is $6,000, then multiply that by 28. 6,000 x 28 = 168,000.
– Now, divide that total by 100. 168,000 ÷ 100 = 1,680.

Ready to buy?

If you are planning to buy in the next 45 days, it’s important to get pre-qualified since many sellers only consider pre-qualified offers. Getting pre-qualified is also the next step toward pre-approval, where you can lock in your interest rate.

Purchasing a home is one of the biggest, most important investments you’ll make. Lean on us for reliable and sound advice.

Let’s get started!