Mortgage guide

How Much House Can I Afford?

Home affordability depends on income, debts, down payment, interest rate and the total monthly housing payment. Estimating these numbers before shopping can help set a realistic home budget.

Income

Higher income can support a larger mortgage payment, but income is only one part of affordability. Lenders also look at existing debt and overall financial profile.

Debt-to-income ratio

Debt-to-income ratio compares monthly debt payments with monthly income. Higher debt payments can reduce how much mortgage payment may be affordable.

Down payment

A larger down payment reduces the loan amount and can improve affordability. It may also reduce the need for mortgage insurance.

Interest rate

Higher mortgage rates increase monthly payments. Lower rates can make the same home price more affordable.

Other housing costs

Property taxes, homeowners insurance, HOA fees, repairs and maintenance can all affect affordability.

Try our Mortgage Affordability Calculator or Mortgage Calculator to estimate a home buying scenario.

Important note

This article is for educational purposes only and is not mortgage, lending, tax or financial advice.