Based on your income, debts, and down payment
Find out how much house you can afford based on your income, debts, down payment, and current interest rates. See estimated monthly payments including principal, interest, taxes, and insurance.
The standard guideline is the 28/36 rule: spend no more than 28% of gross monthly income on housing costs (mortgage, taxes, insurance) and no more than 36% on total debt (housing plus car loans, student loans, credit cards). Lenders use your Debt-to-Income (DTI) ratio to determine loan eligibility.
Your monthly payment consists of four parts (PITI): Principal (repaying the loan), Interest (cost of borrowing), Taxes (property tax escrow), and Insurance (homeowner's insurance and PMI if applicable). The principal and interest are fixed for fixed-rate mortgages, but taxes and insurance can change annually.
A larger down payment reduces your loan amount, monthly payment, and total interest. With less than 20% down, you will typically pay Private Mortgage Insurance (PMI), adding 0.5-1% of the loan amount annually. Saving for 20% down eliminates PMI and may qualify you for better interest rates.
Mortgage rates fluctuate with economic conditions. Even a 0.5% rate difference significantly impacts total cost — on a $300,000 loan, it is roughly $30,000 over 30 years. Get pre-approved before house hunting. Compare offers from multiple lenders. Consider both fixed and adjustable rates based on how long you plan to stay in the home.
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Our calculator uses standard formulas and industry-accepted methods for high accuracy. Results are suitable for planning and estimation. For critical applications, always verify with a professional.
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We regularly update our tools to ensure accuracy and improve the user experience based on feedback. The underlying formulas are based on established standards and are verified for correctness.