Home Affordability Calculator

How much should you spend on a house?

You're starting your house search, but the big question is still looming over your head: How much should I spend on a house? Our mortgage calculator can help you decide.

How to use the calculator

Before you get started, you'll want to go back through your bank account and credit card bills to figure out exactly how much you spend every month on things like groceries, going out, and other debts. Add all of those numbers up and use it as your monthly debt. Then estimate how much your new home will be, how much money you have for a down payment, and what interest rates are. 

When you're inputting your numbers, don't forget to include your auto loans, credit card payments, student loans, and any other payments into your monthly debt. Once you calculate what you can afford, decide if you're comfortable paying that amount each month. 

Things to keep in mind

Remember to include estimates for water, utilities, property tax, and insurance in your overall budget for your home! Your lender will likely be able to help you estimate taxes and insurance, but your utilities and water will depend on personal usage, the size of your home, and where your home is located. You should also consider how much you want to spend, just because you can afford a $500,000 house doesn't mean you will not be happy with a $250,000 house.

Amortization Table

The amortization table in the calculator will break down how much you'll pay in principal and interest each month. Remember, your mortgage payments are front-loaded with interest payments, which means the bulk of your monthly payment in the early years goes to interest. Eventually, you'll reach a point where you're paying more in principal than interest.