Affordability Calculator - How Much House Can I Afford?

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Your debt-to-income ratio helps determine if you would qualify for a mortgage. Use our DTI calculator to see if you're in the right range.

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Interested in refinancing your existing mortgage? Use our refinance calculator to see if refinancing makes sense for you.

Factors that impact affordability

When it comes to calculating affordability, your income, debts and down payment are primary factors. How much house you can afford is also dependent on the interest rate you get, because alower interest ratecould significantly lower your monthly mortgage payment. While your personal savings goals or spending habits can impact your affordability,getting pre-qualified for a home loancan help you determine a sensible housing budget.

How to calculate affordability

Zillow's affordability calculator allows you to customize your payment details, while also providing helpful suggestions in each field to get you started. You can calculate affordability based on your annual income, monthly debts and down payment, or based on your estimated monthly payments and down payment amount.

Our calculator also includes advanced filters to help you get a more accurate estimate of your house affordability, including specific amounts of property taxes, homeowner's insurance and HOA dues (if applicable). Learn more about the line items in our calculator to determine your ideal housing budget.

Annual income

This is the total amount of money earned for the year before taxes and other deductions. You can usually find the amount on your W2 form. If you have a co-borrower who will contribute to the mortgage, combine the total of both incomes to get your annual income.

Total monthly debts

These are recurring monthly expenses like car payments, minimum credit card payments or student loans. You can adjust this amount in our affordability calculator as needed. For example, if you have a $250 monthly car payment and $50 minimum credit card payment, your monthly debt would be $300.

Down payment

The amount of money you spend upfront to purchase a home. Most home loans requirea down payment of at least 3%. A 20% down payment is ideal to lower your monthly payment, avoid private mortgage insurance and increase your affordability. For a $250,000 home, a down payment of 3% is $7,500 and a down payment of 20% is $50,000.

Debt-to-income ratio (DTI)

The total of your monthly debt payments divided by your gross monthly income, which is shown as a percentage. Your DTI is one way lenders measure your ability to manage monthly payments and repay the money you plan to borrow. Our affordability calculator will suggest a DTI of 36% by default. You can get an estimate of your debt-to-income ratio using ourDTI Calculator.

Interest rate

The amount that a lender charges a borrower for taking out a loan. Typically, the interest rate is expressed as an annual percentage of the loan balance. The borrower makes payments (with interest) to the lender over a set period of time until the loan is paid in full. Our affordability calculator uses the current national average mortgage rate. Your interest rate will vary based on factors like credit score and down payment. Calculate yourmortgage interest rate.

Loan term

The length by which you agree to pay back the home loan. The most common term for a mortgage is 30 years, or 360 months, but different terms are available depending on thetype of home loanthat works best for your situation. You can edit your loan term (in months) in the affordability calculator's advanced options.

Property tax

When owning a home, you pay annual property taxes based on the assessed value of the property or purchase price of the home, which can affect your affordability. The tax rate you pay can vary by state, county and municipality. Our calculator assumes a property tax rate by default, but you can edit this amount in the calculator's advanced options. To obtain a more accurate total payment amount,get pre-qualified by a lender.

Homeowner's insurance (HOI)

Also known as homeowner's insurance is atype of property insurancethat covers a private residence. Typically, HOI is required to get a home loan. The cost may vary depending on your location, type of coverage, any discounts you qualify for and your insurance provider. Generally, homeowner's insurance costs roughly$35 per month for every $100,000of the home's value. Consult your insurance carrier for the exact cost. You can edit the calculator's default amount in the advanced options.

Private mortgage insurance (PMI)

Many lenders commonly require private mortgage insurance if a borrower contributes less than a 20% down payment on a home purchase. PMI protects the lender against losses that may occur when a borrower defaults on a mortgage loan. Our calculator bases the PMI on the home price and down payment amount. You can choose to include or exclude PMI in the advanced options of the affordability calculator.

Homeowner's Association (HOA) dues

Some communities, such as condominiums and townhomes, are governed by a homeowner's association (HOA) that maintains communal areas and enforces rules and regulations for a monthly fee. Any HOA dues you pay each month can affect your affordability. You can edit this number in the affordability calculator advanced options.

How much mortgage can I qualify for?

Lenders have apre-qualification processthat takes your finances (such as income and debt) into account to determine how much they are willing to lend you. Once the lender has completed a preliminary review, they generally provide a pre-qualification letter that states how much mortgage you qualify for. Get pre-qualified by a lender toconfirm your affordability.

Most affordable markets for homebuyers

According to 2020 data fromZillow Research, record low mortgage rates have helped to boost affordability for potential homeowners. The table below shows the top 10 most affordable markets to live in (among the nation's 50 largest) for December 2020 and is based on a typical home value of no more than $300,000 (the typical U.S. home value is about $270,000). The market and share of income spent on a mortgage may fluctuate based on the current mortgage rate, the typical local homeowner's income and the typical local home value.

Market	Share of Income Spent on Mortgage	Zillow Home Value Index (December 2020)
Birmingham, AL	12.4%	$186,523
Oklahoma City, OK	12.6%	$168,880
Indianapolis, IN	12.7%	$202,370
Louisville-Jefferson County, KY	12.9%	$196,330
Memphis, TN	13.0%	$171,488
Cincinnati, OH	13.2%	$205,977
Pittsburgh, PA	13.2%	$175,882
St. Louis, MO	13.5%	$195,380
Cleveland, OH	13.8%	$173,637
Milwaukee, WI	14.0%	$217,160

Frequently asked questions about affordability

How much house can I afford?
How much house can I afford with an FHA loan?
How much house can I afford with a VA loan?
How much should I spend on a house?

Low down payment mortgages

Looking for a low down payment home loan? Here's a look at home loan options that allow for down payments of 3.5% or less.

How to qualify for a mortgage

When you apply for a loan, a lender will scrutinize your financial situation to make sure you qualify. Here's what they're looking for.

Buying with bad credit

If you have bad credit and fear you'll be denied for a mortgage, don't worry. You may still be able to get a loan with a low credit score.

Affordability Calculator - How Much House Can I Afford? | Zillow (2024)

FAQs

How much house can I afford based on my salary? ›

You should aim to keep housing expenses below 28% of your monthly gross income. If you have additional debts, your housing expenses and those debts should not exceed 36% of your monthly gross income. Your max purchase budget is the loan amount that lenders could probably give you based on what you've told us.

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Can I afford a 400k house with $70 K salary? ›

How much income you need to buy a house in a specific price range largely depends on the type of loan you're applying for, where you live and other factors. For example, at current mortgage rates, borrowers with an FHA loan and a 10% down payment would need to earn about $70,000 a year to afford a $400,000 house.

What credit score is needed to buy a $400k house? ›

Minimum Credit Score: 620

Suppose you can put 20% down on your $400k home and are otherwise able to qualify for a conventional loan. In that case, you'll probably get some of the lowest monthly payments available – apart from perhaps a VA mortgage.

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What credit score is needed to buy a house? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable-rate mortgages (ARMs).

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How can the average person afford a house? ›

Now, Americans must earn roughly $106,500 in order to comfortably afford a typical home, a significant increase from the $59,000 annual household income that put homeownership within reach for families in 2020, according to new research from digital real estate company Zillow.

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Can I buy a house making 60K a year? ›

If you earn $60K a year, that means you can afford to spend around $180,000 on a house, maybe a bit more if you have little or no other debts. However, depending on where you want to live, interest rates, and how much debt you're carrying, that figure could change significantly.

How much do I need to make to buy a $300k house with an FHA loan? ›

Following the 28/36 rule, you should make roughly triple that amount to comfortably afford the home, which is $72,000 annually. Keep in mind that these calculations do not include the cash you'll need for a down payment and closing costs.

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How much can I afford for a house if I make $100000 a year? ›

Another rule of thumb often applied when buying a home is to not spend more than three times your annual income on a home. If you earn $100,000 a year, that would be $300,000. A salary of $100,000 is well above the national median income (according to Census data, the national median income was $74,580 in 2022).

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How much of a house can I afford if I make $70000 a year? ›

One rule of thumb is that the cost of your home should not exceed three times your income. On a salary of $70k, that would be $210,000. This is only one way to estimate your budget, however, and it assumes that you don't have a lot of other debts.

Can I buy a house if I make 45000 a year? ›

On a salary of $45,000 per year, you can afford a house priced at around $120,000 with a monthly payment of $1,050 for a conventional home loan — that is, if you have no debt and can make a down payment. This number assumes a 6% interest rate.

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How much house can I afford if I make $60000 a year? ›

An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.