How Much House Can I Afford Calculator

Looking for a house can be an exciting adventure. You’re choosing the next home for yourself and your current (or future) family. It’s hard to not get lost in the fantasy of the real estate websites, architectural magazines, and home décor media. You want your house to be perfect.

Before you get ahead of yourself, you should find out how much house you can actually afford. Our How Much House Can I Afford Calculator can help you figure this out as a dollar value. Once you have this number, you can begin to apply real features to your dream home. This can be the location of your home, the type of dwelling, the size of the house, or other cosmetic characteristics.

How Much House Can I Afford

Income Information

Mortgage Information

Optional House Information:

Monthly Costs

Closing Costs

Repairs and Improvements Needed

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Internal Calculation

Number of Compounding Periods: 12
Number of Payments Per Year:
Total Periods:
Rate per Period:


Income Available:
Monthly Payment:
Payment Per Period:
Total Mortgage Available:
House You can Afford:
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By using this calculator you agree to terms and conditions. These calculators are designed to be informational and educational tools only, and when used alone, do not constitute investment or financial advice. We strongly recommend that you seek the advice of a financial services professional before making any type of investment or deciding on your financial matters. This model is provided as a rough approximation of future financial performance. The results presented by this calculator are hypothetical and may not reflect the actual growth of your own investments. We can't take into account potential lender fees, payoff schedule can be longer than in the estimation. Financialfreedom and its affiliates are not responsible for the consequences of any decisions or actions taken in reliance upon or as a result of the information provided by these tools. Financialfreedom is not responsible for any human or mechanical errors or omissions.

How to Use Our How Much House Can I Afford Calculator

To figure out how much house you can afford, do the following steps:

  1. Indicate whether one (single) or two (double) incomes will be used to pay for the house.
  2. For each income to be used, enter the annual income pre-tax.
  3. Input your tax rate, current monthly debt obligations, and debt-to-income threshold in the appropriate boxes.
  4. Under mortgage information, enter the down payment you intend to provide, and the interest rate for which you qualify. Select your preferred mortgage term and mortgage payment frequency.
  5. You can fill out the Optional House Information and Repairs and Improvement Needed sections, but it is not mandatory. Using correct information for this section will improve the accuracy of your results.

How Much House Can I Afford Calculator Definitions

To properly understand how much house you can afford, you will need to know some terms.

Annual Income Pre Tax. The amount of money earned over a year, before taxes are subtracted. It is also known as gross annual income.

Closing Costs. Any costs which are normally acquired when finalizing a real estate transaction, beyond the price of the property. These may be paid by the buyer, the seller, or both parties.

Current Monthly Debt Obligations. Also called recurring debt, this is all the money that you presently owe on a monthly basis. This usually consists of utilities, phone bills, credit card payments, among other debts. You may choose to use the average monthly value of the 12-month cycle. Another option is to use the highest value of the last 12 month as a worst-case scenario.

Desired Debt-to-Income Threshold. The total maximum monthly debt you want to have, divided by your gross monthly income, as a percentage.

Down payment. An initial payment made towards your mortgage.

House you can afford. The maximum price of the dwelling that you can manage to pay for with your financial situation.

Income. Any money received regularly from work or investments.

Interest Rate. The charge from your lender for use of their credit, as a percentage of the mortgage principal.

Monthly Payment. The expected monthly reimbursement to your lender for your mortgage.

Mortgage Payment Frequency. How often you will submit payment to the lender. More frequent payments save you money over time.

Mortgage Term. The length of your mortgage loan.

Payment Per Period. How much you send the lender per period of time.

Tax Rate. The highest tax percentage that your income falls within.

Total Mortgage Available. The maximum loan you should undertake in order to purchase a house.

Understanding the Results

We will use the following example to illustrate how the calculator works. You and your spouse are looking to purchase a house, and you both make $100,000 each before taxes. Your tax rate is 22% each. Together, your current monthly debt obligations are $900, and you would prefer your debt-to-income threshold to be no more than 30%. You can provide a $15,000 down payment together, and qualify for a 5% interest rate. You select a 30-year mortgage term and plan to pay once per month. As you don’t know your closing or repairs and improvements costs, you leave these as is. You plug this information into the calculator and the results are shown below.

You’ll make 12 payments per year, adding up to 360 payments over a 30-year mortgage. Your interest charge per payment period is 0.417%. Based on the information provided, you’ll have $56,759.87 available after taxes and monthly obligations. You can afford a monthly payment of $4,729.99, which is also your payment per period in this case. The total mortgage you can undertake is $880,708.89; you can afford $892,498.89 worth of house.

Make Appropriate Decisions Regarding Your New Home

It’s better to go house hunting with the knowledge of how much house you can afford. Once you have this number, you can develop a budget, and make realistic and appropriate decisions regarding your new home. Remember that the more accurate your input values are, the better your results will be.

Use our True Cost of Owning a Home Calculator to find out the costs of owning your new home.