How Can I Calculate If I Can Afford a House?
Determining if you can afford a house involves more than just calculating your budget. It’s about understanding your financial health and future goals. This calculator helps you make an informed decision.
- Enter your monthly income.
- Enter your monthly debt payments.
- Enter your savings for the down payment.
- Choose your preferred loan term.
- Click ‘Calculate’.
The calculator uses the 28/36 rule, where your monthly mortgage should not exceed 28% of your gross income, and your total debt (including mortgage) should not exceed 36%. It also considers your down payment and loan term.
| Region | Average Price |
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| Loan Term | Average Interest Rate |
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- Consider your long-term plans when choosing a loan term.
- Save for a larger down payment to reduce your monthly mortgage.
- Improve your credit score to qualify for better interest rates.
What is the 28/36 rule?
The 28/36 rule is a guideline used by lenders to determine how much a borrower can afford to pay for a mortgage. It suggests that a borrower should spend no more than 28% of their gross income on housing and no more than 36% on total debt.
How much should I save for a down payment?
Ideally, you should aim to save at least 20% of the home’s purchase price for the down payment. This helps you avoid private mortgage insurance (PMI) and gives you more equity in your home.
For more information, see the CFPB’s guide on homeownership and the HUD’s guide on buying a home.