Home affordability
How much house can you afford? Count every monthly cost of owning, including taxes, insurance, PMI, HOA and upkeep, and compare a comfortable budget with what a lender may approve.
Comfortable price range
How this works
- Your budget is the share of gross income you pick, covering every monthly cost of owning: principal and interest, property tax, home insurance, mortgage insurance (PMI), HOA dues and an upkeep reserve.
- The comfortable price is the highest price that keeps those costs inside your budget, keeps all debt payments (housing plus your other debts, without upkeep) at or under 36% of gross income, and leaves enough savings for closing costs and at least 3% down.
- The lender figure uses the same savings test but lets debt payments reach 43% of gross income, a common lending ceiling, and ignores upkeep. Lenders differ, and some approve more.
- PMI is charged with less than 20% down, at a rate based on your credit, until you owe 80% of the price. Insurance starts at about 0.5% of the price per year. Rates, PMI and insurance are estimates; quotes will differ.
- Not counted: utilities, moving costs, furniture, and any change in income or rates. Conventional loans only; FHA, VA and USDA loans have different down payment and insurance rules.
What is the 28/36 rule?
Spend no more than 28% of gross monthly income on housing and no more than 36% on all debt payments combined. The 28% setting here uses it, and also counts upkeep.
How much will a lender let me borrow?
Many lenders approve total debt payments up to about 43% of gross income, and some go higher. That limit ignores maintenance and saving, so it often exceeds what is comfortable.
How much should I budget for home maintenance?
About 1% of the price per year is a common rule of thumb: less for newer homes, more for older ones.
Do I need 20% down?
No. Many conventional loans allow 3% down, but under 20% you usually pay PMI until you owe 80% of the price.
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