Home Affordability Calculator

See what you can afford and find homes within your budget

How to use the calculator

In the calculator above, enter your financial details to estimate your maximum home price. You'll be asked for:

• Annual income - Gross yearly income before taxes.
• Monthly debts - Recurring obligations like credit card payments, car loans, and student loans.
• Down payment - A dollar amount or percentage of the home price.
• Loan term - Length of repayment (ex. 15 or 30 years).
• Interest rate - Current average or lender quote.
• Property taxes - Estimated based on local rates.
• Homeowners insurance - Typically 0.5%-1% of home value per year.
• Homeowner association (HOA) fees - Monthly dues if applicable.

Your estimate will factor in principal and interest, private mortgage insurance (if required), and the other data you provide to give you a complete picture of what you might afford. Gercide Luc, who works as community programs associate director for the Boston nonprofit housing agency Urban Edge, helping people looking to buy their first home, told Homes.com that she cautions clients that the maximum dollar figure the calculator gives them may not leave enough wiggle room in their budgets, and they should consider looking for a house priced a bit lower.

"A lot of people don't earn enough," she said. "It's kind of disappointing for clients that after they've improved their credit and saved $1,000 a month for a mortgage payment, I tell them, you're going to have to wait because prices are going up so quickly. You might be able to afford a particular amount right now, but by the time you're ready next spring, you might have to save up more."

These key factors affect home affordability

Income and expenses

Your income sets the foundation for affordability, but your spending habits and fixed vs. variable expenses determine how much of that income you can realistically put toward housing.

Credit score

A higher credit score can help you secure a lower interest rate, which lowers your monthly payment and increases your buying power. Luc, of Urban Edge, said even a small improvement in one's credit score can open up homebuying options, but it's important to understand the numbers and how long it can take to raise them.

"If there's an error on their credit report, that might take 30 days [to resolve]. If it's trying to overcome late payments, that can take a bit longer," she said. "Items that have gone to a collection agency can take 60 to 90 days after they're resolved for the credit score to go up. I always tell clients, it goes down faster than it goes up. You have to have a 640 score for a single-family house or condo and a 660 for a multifamily property."

Debt-to-income ratio (DTI)

The debt-to-income ratio compares your monthly debts to your income. A lower ratio means more flexibility in your budget. Lenders often look for 28% or less for housing costs, meaning they make up no more than that percentage of your income. Debts should not exceed 36% of your income. This is a widely used guideline that helps ensure you can comfortably handle your mortgage, taxes and insurance, while leaving room for other expenses and savings.

Down payment

A larger down payment reduces your loan amount, can help you avoid private mortgage insurance, and may secure a lower interest rate. Common minimums are 3% for conventional loans, 3.5% for Federal Housing Administration loans, and 0% for Veterans Affairs or U.S. Department of Agriculture loans (for eligible buyers). A down payment is an example of an upfront cost you'll pay before you close on a house, along with other closing costs and prepaid expenses like property taxes and homeowners insurance. Closing costs often range from 2% to 5% of the purchase price, so budgeting for these is important.

Mortgage type

Your loan choice affects affordability:

• Conventional loans - Flexible, but often require stronger credit.
• Federal Housing Administration (FHA) loans - Lower down payment but include mortgage insurance.
• Veterans Affairs (VA) loans - No down payment for qualifying veterans and service members.
• U.S. Department of Agriculture (USDA) loans - No down payment for certain rural and suburban areas.

Interest rates

Lower interest rates reduce your monthly mortgage payment, which can increase the total home price you can afford. Even a small rate change can make a noticeable difference, so monitoring rates and locking in when they're favorable can be a smart move.

Property taxes

Property taxes are paid to your local government and fund services like schools, roads, and public safety. The amount depends on your home's value and the local tax rate. Rates vary by location and can change over time, so budget for potential increases.

Homeowners insurance

Homeowners insurance protects your property from damage or loss caused by events, such as fire, theft, or severe weather. Costs vary by location, coverage, and home condition. Some areas may require separate flooding, earthquakes, or wind damage policies.

Homeowner association fees

Homes in communities with a homeowners association require monthly or annual dues. These cover shared amenities and services like landscaping, security, and exterior upkeep. Associations may also charge special assessments for large or unexpected projects.

Other homeownership costs

Beyond the mortgage and insurance fee, budget for utilities such as electricity, gas, water, trash pickup, and internet service. Set aside funds for ongoing maintenance like lawn care and appliance repairs, plumbing, and roof repairs, especially in older homes.

Interest rates

Lower interest rates reduce your monthly mortgage payment, which can increase the total home price you can afford. Even a small rate change can make a noticeable difference, so monitoring rates and locking in when they're favorable can be a smart move.

If you have a stable income, manageable debts, and enough savings for your down payment and closing costs, you may be ready to buy now — especially if you find a home that fits your needs. If you're not financially prepared, waiting while you improve your savings, credit, and/or debt levels can put you in a stronger position later.

How to use your results

Use your estimated maximum home price to explore different scenarios and find a balance between what you qualify for and what fits your budget.

Try adjusting:

• Down payment amount to see how more money paid upfront can remove private mortgage insurance or reduce your loan balance.
• Loan term to compare the higher monthly payments of a 15-year mortgage with the lower payments of a 30-year option.
• Interest rate to understand how market changes, or a better credit score could expand your price range.
• Property tax and insurance estimates to see how location-specific costs affect your monthly payment.
• HOA fees, look for communities that offer shared amenities and services for less of a monthly cost.

Your affordability estimate shows the total home price you might qualify for. If you want to see how that amount translates into a monthly payment, use our mortgage calculator to break down costs by principal, interest, taxes, and insurance. Luc said she and her clients look at various scenarios using a home affordability calculator to help them avoid overcommitting financially.

"I create a budget for clients and I'm looking at not only what they can afford, but also what their expenses are," she said. "How much are they spending on gas, takeout, monthly subscriptions, any of those things. We look at how much debt they can pay off, are clients purchasing as a couple or alone, are they putting money in a 401K?"

Ways to increase how much house you can afford

If your estimate is lower than expected, there are practical steps you can take to boost your buying power. Small changes to your finances can make a noticeable difference in what you can afford.

Consider:

• Paying down your existing debt to lower your debt-to-income ratio, which may help you qualify for a larger loan. High debt can reduce the loan amount you qualify for and may lead to higher interest rates. Lowering your debt before applying for a mortgage can improve your borrowing power, expand your home price range, and give you more financial breathing room.
• Improving your credit score to secure a lower interest rate, reducing your monthly payment.
• Saving for a larger down payment to borrow less, potentially avoid PMI, and expand your price range.
• Exploring lower-cost areas with reduced property taxes or homeowners insurance.
• Researching down payment assistance programs that offer grants, forgivable loans, or other support, especially for first-time buyers.

Even modest progress in one or more of these areas can shift your affordability range and open up more options in the market.