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Home affordability

How much house can you afford? Find your price the way lenders do, by debt-to-income, then see the real monthly cost once upkeep and other costs lenders leave out are added.

Home price you can afford

    How this works

    • The price is set the way lenders set it: by debt-to-income. Your housing payment (principal and interest, property tax, home insurance, mortgage insurance and HOA dues) plus your other debts must stay under the limit you pick: 33% (Cautious), 36% (Comfortable) or 43% (Stretch). Cautious and Comfortable also cap the housing payment alone, at 25% and 28% of gross income; 36% with 28% is the classic 28/36 rule. Stretch uses 43%, where many lenders stop; a few allow up to 50%, the usual absolute ceiling, so custom limits stop there too.
    • Your savings must also cover closing costs and at least 3% down. Everything left after closing costs goes to the down payment.
    • Lenders leave out upkeep and utilities, but you still pay them. The real monthly cost adds an upkeep reserve (by home age) and any utilities you enter, so you can see what owning actually takes each month.
    • 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: moving costs, furniture, and any change in income or rates. Conventional loans only; FHA, VA and USDA loans have different down payment, insurance and debt-to-income 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. It is the default 36% (Comfortable) setting here.

    How much will a lender let me borrow?

    Many lenders approve total debt payments up to about 43% of gross income, and some go to 50%. Those limits ignore upkeep, utilities and saving, so check the real monthly cost before stretching.

    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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    Should you buy at all? Compare renting and buying year by year. Buying a car too? See how much car fits your budget.