Mortgage Guide

How Much House Can I Afford?

Affordability depends on your annual income, monthly debt, down payment, interest rates, property taxes, insurance, and your total monthly housing budget.

What determines home affordability?

The main factors that dictate how much house you can afford are:

annual income
monthly debt
down payment
mortgage interest rate
property taxes
insurance
HOA if applicable

A simple affordability framework

A common framework relies on debt-to-income (DTI) ratios to stay within a monthly housing budget. Lenders look at front-end DTI (housing payment as a percentage of gross income) and back-end DTI (all minimum debt payments plus housing as a percentage of income) to ensure your payments remain manageable.

Common affordability mistakes

When estimating a housing budget, avoid these common pitfalls:

focusing only on mortgage principal and interest
ignoring taxes and insurance
buying at the top of the lender-approved range
underestimating cash needed at closing

Tools to use next

Home Affordability Calculator

Estimate the maximum home price you can afford based on income and debt.

Down Payment Calculator

Calculate required down payment and estimate your monthly payment.

Rent vs Buy Calculator

Compare long-term costs of renting versus owning a home.

Final takeaway

Home affordability is not just about what a lender may approve, but what fits sustainably into a household budget.