Home Affordability Calculator
Estimate the home price you can comfortably afford.
What is a Home Affordability Calculator?
A Home Affordability Calculator is a financial tool that helps prospective homebuyers estimate a realistic price range for a new home. It works by analyzing key financial inputs: your gross annual income, total monthly debts (like car payments and student loans), and the amount you have saved for a down payment. It uses common lending guidelines, such as the 28/36 rule, to calculate a maximum monthly mortgage payment and, from there, a comfortable home price.
How to Use the Home Affordability Calculator
To estimate how much house you can afford, enter the following details:
- Gross Annual Income: Your total household income before taxes.
- Total Monthly Debts: The sum of all your recurring monthly debt payments (e.g., car loans, student loans, credit card payments).
- Down Payment: The total amount of cash you have available to put towards the home purchase.
- Interest Rate: The current mortgage interest rate you expect to qualify for.
The calculator will then provide you with an estimated affordable home price.
Why Use a Home Affordability Calculator?
This calculator is the first step in the home-buying journey for many:
- Sets Realistic Expectations: It provides a data-backed home price estimate, preventing you from wasting time looking at properties outside your budget.
- Improves Financial Planning: Understanding your affordable mortgage payment helps you budget effectively for other costs of homeownership like taxes, insurance, and maintenance.
- Empowers Buyers: It gives you a strong starting point for discussions with real estate agents and mortgage lenders.