House Affordability Calculator to Calculate a Realistic Home Price

House Affordability Calculator Sign

The free online calculator will calculate the price of the home you can afford based on the amount of cash you have available for a down payment and on the monthly funds available for paying your mortgage payment and ongoing costs of ownership.

Unlike other online home affordability calculators that tell you how much house you can afford based solely on the monthly mortgage payment, this calculator includes an estimate of the monthly homeownership costs that will greatly impact how much house you can truly afford.

If you are only interested in finding out the size of the mortgage you might qualify for, please visit the Mortgage Prequalification Calculator.

Or, if you would like to compare buying a home versus renting a home or an apartment, please visit the Rent Vs Buy Calculator -- which includes other home affordability factors you need to consider.

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House Affordability Calculator

Calculate the home price you can afford while accounting for the costs real estate agents and mortgage brokers withhold from their formula.

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Down pmt:Down payment:Cash available for down payment:Cash available for down payment:

Cash available for down payment:

Enter the dollar amount of the cash you will have available for a down payment, after all closing costs have been paid. Enter the amount without the dollar sign and any commas.

$
Monthly cash:Monthly cash:Monthly PI payment and costs:Monthly PI payment and home ownership costs:

Monthly PI payment and home ownership costs:

Enter the dollar amount of the funds you will have available each month to make your mortgage payment and pay for all monthly home ownerships costs. Enter the amount without the dollar sign and any commas.

$
Rate:Interest rate:Annual interest rate:Annual interest rate:

Annual interest rate:

Enter the annual percentage rate (APR) of the home loan, but without the percent sign.

%
Loan years:Loan years:Mortgage term in number of years:Mortgage term in number of years:

Mortgage term in number of years:

Enter the term of the home loan in number of years.

#
Property tax:Property tax:Property tax rate:Property tax percentage rate:

Property tax percentage rate:

If your property tax rate is different from the default rate of 1.15%, change the property tax rate to more closely match that of your state's rate (without the percent sign).

%
Home price:Home price:Home price:Home price:

Home price:

Based on your entries, this is purchase price of the home you may be able to afford.

Down pmt:Down payment:Down payment:Down payment:

Down payment:

This is the down payment amount you entered in the top of the house affordability calculator.

Loan amt:Loan amount:Mortgage loan amount:Mortgage loan amount:

Mortgage loan amount:

This is the size of the mortgage you could afford, which is the purchase price minus the down payment.

LTV:Loan to value:Loan to value ratio:Loan to value ratio:

Loan to value ratio:

Based on the purchase price and mortgage amount, this would be your loan to value (LTV) ratio. The house affordability calculator uses this figure to estimate your monthly private mortgage insurance premium.

House Affordability Breakdown
Tap the text for a description of each row result.
Pmt and Own CostsPmt and Own CostsPayment and Ownership CostsPayment and Ownership CostsMonthlyMonthlyMonthlyMonthlyAnnualAnnualAnnualAnnual
Mortgage PI pmt:Mortgage PI pmt:Mortgage PI payment:Mortgage PI payment:Mortgage PI payment:

Mortgage PI payment:

Based on your entries, this will be your monthly and annual principal and interest payment.

Utilities:Utilities:Utilities:Utilities:Utilities:

Utilities:

Based on your entries, this will be your monthly and annual utility costs (1.57% of the home value per year).

Maintenance:Maintenance:Maintenance:Maintenance:Maintenance:

Maintenance:

Based on your entries, this will be your monthly and annual maintenance costs (.39% of the home value per year).

Insurance:Insurance:Homeowner insurance:Homeowner insurance:Homeowner insurance:

Homeowner insurance:

Based on your entries, this will be your monthly and annual homeowner insurance costs (.42% of the home value per year).

Property taxes:Property taxes:Property taxes:Property taxes:Property taxes:

Property taxes:

Based on your entries, this will be your monthly and annual property tax costs.

PMI:PMI:Private mortgage insurance:Private mortgage insurance:Private mortgage insurance:

Private mortgage insurance (PMI):

Based on the estimated loan to value ratio, this will be your initial monthly and annual private mortgage insurance premium. This premium will decrease as you increase your equity in the home.

Total:Total:Total:Total:Total:

Total:

Based on your entries, this is monthly and annual total of your payment and home ownership costs for the purchase price of the home the house affordability calculator estimates you can afford.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools

Alert

Beware of the hidden costs of home ownership.

Should you believe a commissioned real estate agent or mortgage broker when they tell you how much house you can afford?

No!

That is, not unless you're on a mission to increase their financial happiness at the expense of yours.

No matter what they tell you, the goal of every real estate agent and mortgage broker is to get you to buy the home that pays them the highest return for their efforts.

And unless these vested sellers happen to be your loving parents or close personal friends, they really could care less if ten years from now you are forced to sell your home at a loss because you couldn't afford to keep up with the mortgage payments and all of the hidden costs of ownership they failed to warn you about.

Income Level Has Nothing To Do With Affordability

No matter what your income level, if your annual non-home related expenses meet or exceed your take-home pay, then you can't afford to purchase and maintain a home.

The only number that matters when determining how much house you can afford is the difference between how much you take home and how much you spend on non-home related expenses.

If you don't know how much that difference is, be sure to visit the personal budgeting calculator to get a realistic affordability number to work with.

Beware of Hidden Costs of Home Ownership

Contrary to what some real estate agents and mortgage brokers will attempt to get you to believe, just because you can afford to make the prescribed monthly principal and interest mortgage payment does not necessarily mean you can afford to purchase and own the house in question.

That's because there are many other costs that come with owning a house that are above and beyond the monthly payment. These include:

  • Private Mortgage Insurance (PMI)
  • Property taxes
  • Homeowner insurance
  • Utilities
  • Maintenance costs

Did Your Real Estate Agent Tell You This?

According to an American Housing Survey (AHS) conducted by the Census Bureau in 2003, the average annual cost to maintain and operate a house at that time was $5,464, with 38% of that amount going for taxes, 40% for utilities, 12% for insurance, and 10% for maintenance.

Using the CPI Calculator to adjust for inflation between 2003 and 2018, that $5,464 has likely grown to $7,470. And if you divide that by 12 months ...

That's roughly $622 per month just for home ownership costs.

I believe the reported maintenance figures are actually lower than they should be based on hearing numerous real estate agents report that most homeowners are failing to properly maintain their homes.

Ignored Ownership Costs Lead to Falling Home Values

In my opinion, homeowners failing to properly maintain their homes is a result of purchasing more house than they could afford.

After all, if you buy more house than you can afford, then all of your available funds will be going toward meeting the minimum obligations to keep your house -- leaving little if any funds for home maintenance and repairs.

Of course, if you can't afford to properly maintain the house you are buying, then your house may actually fall in value (depreciate) over time.

Or, even if you are properly maintaining your house, but your neighbors are not, then your house's value might fall in spite of your best efforts -- because now it sits in a run-down neighborhood with falling property values.

Ignorance Is Bliss ... For a While

The bottom line is this.

If you buy a home-based on what self-serving sellers say you can afford -- without carefully factoring in the homeownership costs -- then sure, you may be able to afford to make the payments for a few years.

However, as the mechanical and material parts of your home begin to wear out and need replacement, you will likely come to regret taking the sellers at their word.

Free Home May Be Too Costly

Due to the ignorance of homeownership costs and wrongfully assuming that their income levels would last forever, turns out that many homebuyers couldn't afford their homes even if someone had given it to them for free.

Of course, no one can predict what will happen with your future income.

So what can you do to protect your home from economic downturns besides adding another insurance premium to your budget?

The best way I know of to protect your home from the next time the greedy financial giants decide to fatten themselves up by eating their own children, is to adopt the Grow Slow, Pay As You Go Method of Home Buying.

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.