Discover Your Home Buying Power
Calculate how much house you can afford based on your income and expenses. Free calculator with instant results.
Calculate NowUnderstanding Your Mortgage Affordability
Buying a home is one of the biggest financial decisions you'll ever make. Our mortgage calculator helps you understand exactly how much house you can afford based on your income, debts, and down payment. Unlike simple calculators that only show monthly payments, we provide a comprehensive analysis that considers all aspects of homeownership.
The mortgage approval process involves multiple factors beyond just your income. Lenders evaluate your debt-to-income ratio, credit score, employment history, and available assets. Understanding these factors before you start house hunting can save you time and help you set realistic expectations.
Key Factors That Determine Your Mortgage Affordability
- •Debt-to-Income Ratio (DTI): Most lenders prefer a DTI below 43%, though some may go up to 50% with compensating factors
- •Credit Score (US): Higher scores (740+) qualify for the best rates, potentially saving thousands over the loan term
Credit Score (Canada): Higher scores (680+) qualify for better rates, 720+ for best conventional mortgage terms - •Down Payment (US): 20% avoids PMI, but programs exist for as little as 3-5% down
Down Payment (Canada): 5% minimum, 20% avoids CMHC insurance - •Cash Reserves: Lenders like to see 2-6 months of mortgage payments in savings
Our calculator uses the same guidelines that mortgage lenders use, giving you an accurate picture of what you can qualify for. We also provide a more conservative estimate based on financial best practices, helping you avoid becoming 'house poor' – a situation where your housing costs leave little room for other expenses and savings.
🏠 Smart Home Buying Tips
- 📊28/36 Rule: 28% housing, 36% total debt
- 💰20% Down: Avoid PMI insurance
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Calculation Method
Understanding Interest Rates
Mortgage interest rates significantly impact your buying power. A difference of just 1% can mean tens of thousands of dollars over the life of your loan.
Rate Impact Example:
On a $300,000 loan:
- • 6.5% rate = $1,896/month
- • 7.5% rate = $2,097/month
- • Difference: $201/month or $72,360 over 30 years
Hidden Costs of Homeownership
Your mortgage payment is just one part of homeownership costs. Budget for these additional expenses:
- 💰Property Taxes: Typically 1-2% of home value annually
- 🏠Homeowners Insurance: $1,000-3,000+ per year
- 🔧Maintenance: Budget 1-3% of home value annually
- 🏘️HOA Fees: Can range from $100-1000+ monthly
Complete Guide to Getting a Mortgage
Types of Mortgages Explained
Conventional Loans
The most common type of mortgage, not backed by government agencies. Requires at least 3% down for first-time buyers, 5% for repeat buyers. Best for borrowers with good credit (620+) and stable income.
FHA Loans
Government-backed loans with more flexible requirements. Allow down payments as low as 3.5% with a 580+ credit score. Popular with first-time buyers but require mortgage insurance for the life of the loan.
VA Loans
Available to eligible veterans and service members. Offer 0% down payment options and no PMI requirement. Often have the best rates available but require a VA funding fee.
The Mortgage Application Process
Pre-qualification (1-2 days)
Basic review of your finances to estimate how much you might borrow. Not binding but gives you a ballpark figure.
Pre-approval (3-10 days)
Detailed review including credit check and income verification. Results in a conditional commitment for a specific loan amount.
House Hunting and Offer
Shop within your pre-approved range. Make offers with your pre-approval letter to strengthen your position.
Processing and Underwriting (30-45 days)
Lender verifies all information, orders appraisal, and makes final approval decision.
Closing
Sign final documents, pay closing costs, and receive keys to your new home!
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129 options available
⚠️ Legal Disclaimer & Important Information
Not Financial Advice: This calculator provides estimates for educational purposes only and does not constitute financial, legal, or tax advice. Results are approximations based on the information provided and standard lending guidelines.
US Specific: Results based on conventional lending standards. FHA, VA, USDA, and other government-backed loans may have different requirements. State and local regulations vary significantly.
Variables Not Included: This calculator does not account for all costs including but not limited to: closing costs (2-5% of purchase price), legal fees, land transfer taxes, title insurance, home inspection, appraisal fees, moving costs, immediate repairs, or utility deposits.
Market Conditions: Interest rates, housing prices, and lending standards change frequently. Results are based on current inputs and may not reflect future market conditions.
Individual Circumstances: Actual mortgage approval depends on comprehensive underwriting including but not limited to: verified income, employment history, credit report review, debt obligations, assets, property appraisal, and lender-specific requirements.
Always consult with licensed mortgage professionals, financial advisors, and legal counsel before making home purchase decisions. This tool should be one of many resources used in your home buying journey.
For Planning Purposes Only — These calculations are estimates for educational and planning purposes. Always consult with qualified financial professionals before making financial decisions.
🏡 Helpful Resources
🎯 Mortgage Expert Secrets
💡 The 1% Extra Trick
Paying just 1% extra principal each month can cut your 30-year mortgage to 25 years, saving $50,000+ in interest.
📅 Market Timing Secret
Best days to apply for mortgages are Tuesday-Thursday. Lenders process faster and may offer better terms.
Mortgage Options Comparison(US)
| Loan Type | Min Down Payment | Min Credit Score | PMI Required | Best For |
|---|---|---|---|---|
| Conventional | 3% | 620 | If < 20% | Good credit |
| FHA | 3.5% | 580 | Always | First home |
| VA | 0% | None | No | Veterans |
| USDA | 0% | 640 | No | Rural areas |
| Jumbo | 10-20% | 700+ | No | Expensive homes |
Monthly Housing Cost Breakdown(US)
💵 Included in Monthly Payment (PITI)
⚠️ Additional Costs to Consider
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🔗 Additional Resources
Complete Home Buying Guide 2025
Everything you need to know to buy your first home
Current Mortgage Rates
Daily updated rates from top lenders
Mortgage Calculator API
Free API for developers
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Calculate My BudgetFrequently Asked Questions - Mortgage
How much house can I afford with $70,000 salary?
With a $70,000 annual salary, you can typically afford a home priced between $210,000-$280,000, assuming good credit, 20% down payment, and following the 28/36 debt rule. Use our calculator above for your exact situation.
What's the minimum credit score for a mortgage in 2025?
Minimum credit scores vary by loan type: Conventional loans require 620+, FHA loans accept 580+ (or 500+ with 10% down), VA loans have no minimum but lenders typically want 620+, and USDA loans need 640+.
Should I put 20% down or pay PMI?
A 20% down payment eliminates PMI requirements, which typically costs 0.5-1% annually. However, many buyers purchase with less down. This is educational information - evaluate your specific situation and consult professionals.
How much are closing costs on a $300,000 house?
Closing costs typically range from 2-5% of the home price. On a $300,000 house, expect $6,000-$15,000 in closing costs including appraisal, inspection, title insurance, and lender fees.
What is the difference between a fixed-rate and adjustable-rate mortgage?
A fixed-rate mortgage has the same interest rate for the life of the loan, meaning your monthly principal and interest payments are stable. An adjustable-rate mortgage (ARM) has a rate that changes periodically, so your monthly payments could increase or decrease.
How can I improve my debt-to-income (DTI) ratio?
To improve your DTI ratio, you can either increase your income or decrease your debt. Consider strategies like paying down high-interest loans, avoiding new debt, and exploring opportunities to boost your earnings.
What is a home appraisal and why is it important?
A home appraisal is a professional assessment of a property's value. It is important because lenders use it to ensure they are not lending more money than the property is worth. A low appraisal can impact your ability to secure a loan.
What are the pros and cons of a 15-year vs. a 30-year mortgage?
A 15-year mortgage typically has a lower interest rate and you will pay less interest over the life of the loan. However, the monthly payments are higher. A 30-year mortgage has lower monthly payments, but you will pay more in interest over time.
How does a mortgage calculator work?
A mortgage calculator uses your income, debts, down payment, and interest rate to calculate how much you can borrow and what your monthly payment will be including principal, interest, taxes, and insurance (PITI).
How much house can I afford with my salary?
Generally, you can afford a house that costs 3-4 times your gross annual income. With $75,000 income, you might qualify for a $225,000-$300,000 home, depending on your debts and down payment.
What is the 28/36 rule for mortgages?
The 28/36 rule states you shouldn't spend more than 28% of your gross monthly income on housing expenses (PITI) and no more than 36% on all monthly debts including the mortgage.
How much down payment do I need to buy a house?
You can buy a house with as little as 3% down (conventional loans) or 3.5% (FHA). However, 20% down eliminates PMI and reduces your monthly payment significantly.
What's included in monthly mortgage payment?
Your monthly payment includes: Principal (reduces the loan), Interest (cost of borrowing), Property taxes, Homeowners insurance, and PMI if you put down less than 20%.
How do interest rates affect my payment?
Every 1% increase in interest rate raises your monthly payment by approximately $100-150 per $100,000 borrowed. A $300,000 home would cost $300-450 more per month with 1% higher interest.