Find your price point with our home affordability calculator

Home affordability calculator

Figuring out how much house you can afford is one of the most important parts of the home buying process. Our home affordability calculator can help you explore different prices and shop for your new home with confidence.

How much home can I afford?

Crunching the numbers is the only way to determine how much house you can afford. Our home affordability calculator analyzes your finances to provide realistic estimates that help you look for homes within your budget and avoid overextending yourself financially.

Key benefits of using our calculator:

• Get instant affordability estimates based on your financial situation.
• Understand the difference between what you can afford versus what you might qualify for.
• See how changes to your income, debts, or down payment affect your buying power.

The calculator considers multiple affordability factors, including your gross income, your monthly debts, your available cash for the down payment and closing costs, your credit profile, and local market conditions to give you personalized results.

Beyond that, you’ll want to factor in flexibility for emergency expenses, savings, retirement, and other priorities when determining your housing costs. How much you should actually spend on a home also depends on your goals and preferences.

Using the home affordability calculator

Here's the information you'll need to provide and why each input matters for determining how much house you can afford:

• Location: Things like property taxes and insurance costs vary significantly by location. Entering your target area helps us calculate more precise affordability estimates based on local market conditions and costs.
• Yearly income before taxes: Include your gross annual income from all sources – think about your salary, bonuses, freelance income, and other regular earnings. A big part of determining home affordability is considering how much of your income can safely go toward housing expenses.
• Cash to buy: Enter the total amount you have available for your down payment and closing costs. More cash available typically means you can afford a higher-priced home or secure better loan terms. Remember, you don't need 20% down – many programs allow as little as 3% down.
• Monthly debts: Include the minimum monthly payments for your credit cards, student loans, car payments, personal loans, and other debt obligations. Having lower monthly debt payments means you have more income available for your mortgage payment.
• Credit profile: Your credit score affects your interest rate and loan options. Better credit typically means lower rates, which increases how much house you can afford with the same monthly payment.

What is home affordability?

Home affordability refers to your ability to comfortably purchase and maintain a home based on your income, existing debts, down payment, and other financial factors. It's not just about loan approval – it's about finding a monthly payment that fits your budget and lifestyle goals.

Key affordability factors to consider:

• The 28/36 rule: This rule of thumb suggests spending no more than 28% of your gross monthly income on housing costs – including your mortgage, taxes, insurance, and HOA fees – and no more than 36% on total monthly debt payments.
• Debt-to-income ratio (DTI): This compares your total monthly debt payments to your gross monthly income. The maximum DTI for conventional loans is usually 45%.
• Housing expenses beyond your mortgage payment: As a homeowner, you’ll need to account for and pay property taxes, homeowners insurance, mortgage insurance and homeowners association fees (if applicable), maintenance and repair costs, and utilities.
• Down payment amount: Your down payment affects your loan amount, interest rate, monthly payment, and whether you’ll need mortgage insurance. For conventional loans, putting 20% down eliminates the need for private mortgage insurance (PMI), which protects the lender financially.
• Mortgage type and loan term: Different mortgage programs – like conventional, FHA, VA, and USDA loans – have varying requirements that can affect affordability. Whether you select a 30-year mortgage, a 15-year mortgage, or some other loan term can also significantly change your monthly payment.

How is home affordability calculated?

It takes several steps to calculate home affordability:

1. We use your monthly income and debt to calculate your DTI.
2. Starting with a DTI of 36%, we estimate the home price you could afford.
3. You can adjust the slider underneath the estimated home price to find out what prices would be considered affordable, stretching, or aggressive for your budget.

Why is home affordability important?

Understanding how much house you can afford helps you:

• Shop with confidence. Knowing your realistic price range before viewing homes makes your search more efficient and focused.
• Make competitive offers. You can act quickly in competitive markets while staying within your means.
• Minimize financial stress. You can choose to stay within a comfortable budget that has room for unexpected expenses.
• Plan for long-term success. Your housing costs won’t get in the way of saving for retirement and other financial goals.

Affordability examples by income level

Your home buying power changes with your income. Here are realistic scenarios for different income levels, assuming you have a 30-year fixed-rate mortgage.

How much house can I afford with a $50K salary?

With a $50,000 annual income:

How much house can I afford with a $70K salary?

With a $70,000 annual income:

Tips to increase how much house you can afford

Here are proven strategies to boost your buying power and afford more house.

Reduce monthly debt payments

Paying off your credit cards, student loans, or car payments will improve your DTI, making room in your monthly budget and directly increasing how much house you can afford.

Increase your down payment

Putting more money down allows you to afford a more expensive home. Different ways to come up with the funds include:

• Saving as aggressively as possible for 6 – 12 months
• Using gift money from family members if allowed
• Exploring down payment assistance programs
• Using the Rocket Money℠ app to optimize your spending and saving

Improve your credit score

A higher credit score qualifies you for better interest rates. To increase your credit score, focus on:

• Paying all bills on time
• Reducing credit card balances below 30% of limits
• Avoiding new credit applications before home shopping
• Checking credit reports for any errors

Consider different loan programs

Mortgage requirements can vary between lenders and loan programs. Some may allow for higher DTIs, lower credit scores, or no down payment – factors that could increase your buying power if you’re struggling to qualify.

Check how much you can borrow with different loan types, including:

• Conventional loans
• FHA loans
• VA loans (for eligible service members, veterans, and surviving spouses)
• USDA loans (for those buying in eligible rural areas)

Expand your search area

Explore neighborhoods farther from city centers or find emerging areas where home prices are be more affordable. You can increase your buying power this way and still find a home that meets your needs.

Average home prices by state

Understanding home prices in different states helps you plan your home search and manage your affordability expectations.

Highest-priced states

1. California: $866,000 median home price
2. Hawaii: $761,000 median home price
3. Massachusetts: $696,000 median home price
4. Washington: $665,000 median home price
5. Colorado: $606,000 median home price

Most affordable states

1. West Virginia: $254,000 median home price
2. Iowa: $258,000 median home price
3. Oklahoma: $261,000 median home price
4. Louisiana: $270,000 median home price
5. Mississippi: $273,000 median home price