### How much housecan I afford?

Thinking about buying a house? Before you hit the open houses, use this simple calculator to help estimate what you can afford to buy.
The amount before taxes and deductions.
We'll use this information to figure out your down payment and the house's closing costs.
We're talking student loan payments, car loans, child care, and minimum monthly credit card payments.
If your down payment is less than 20%, your lender may require you to pay private mortgage insurance, which can be costly. That's why we recommend saving for a down payment of 20%.
We ran the numbers, and here's what we've estimated.

### DOWN PAYMENT

This is the percentage of the maximum home price you can afford to pay up front.

### MONTHLY COST

This includes private mortgage insurance, if applicable.

See methodology for more details

### PMI

This would also be included in your monthly costs.
Based on the information you gave us, we used the following assumptions to estimate the maximum price of a home you could buy. Remember, this is just an estimated number, and there are more factors that you may want to consider when buying a house.

### Our Methodology

Here are a few factors that we used to calculate your results.

### 1. Property taxes

The tool makes the assumption that the annual property tax payment is 1.15% of the home’s market value.

### 2. Interest rate and loan duration

A constant interest rate of 7.03% and loan duration of 30 years are used to calculate the annual mortgage payment using an ordinary annuity formula. The monthly mortgage payment is derived by dividing the annual payment by 12.

### 3. PMI

Lenders often resell the mortgage to government-sponsored enterprises Fannie Mae and Freddie Mac. These loans need to conform to the Fannie Mae and Freddie Mac guidelines. One important requirement is the need to pay mortgage insurance if the down payment is less than 20% of the home value. While there are different kinds of nonconforming loans, like FHA, VA, or jumbo loans, we are treating all the loans as conforming loans with only private option for mortgage insurance (PMI). The maximum loan value constraint is also ignored for simplicity. The annual amount of PMI is assumed to be 0.5% of the home value. If the “Use PMI” option is not selected, the PMI amount is excluded from the calculations and the down payment is not allowed to fall below 20% of the home value. If the “Use PMI” option is selected, the PMI amount is considered and the tool may produce a solution that includes a down payment as low as 5%. Speak with your lender for more detailed information about PMI.

### 4. Down payment and closing costs

Buying costs are assumed to be 2% of the home value. The chosen current savings amount is assumed to cover both down payment and buying costs.

### 5. Maintenance and home insurance

Home insurance is assumed to be 0.35% of the home value per year. Maintenance and improvement costs are assumed to amount to 0.5% of the home value per year.

### 6. Monthly Costs

Monthly costs include the mortgage payment, property taxes, home insurance costs, and PMI (if applicable).

### Other considerations

The calculator estimates and outputs the maximum home value that satisfies these two conditions:

• The input savings are sufficient to cover both the down payment and buying costs, with or without PMI.
• The total monthly obligations are less than a debt-to-income ratio of 36%. Total obligations include entered monthly debt payments, mortgage payment, property taxes, maintenance costs, home insurance costs, and PMI (if applicable).

IMPORTANT: This calculator provides a rough estimate of a maximum housing affordability value. The value shown is only an estimate, is hypothetical in nature, and is based on your input and the assumptions built into the tool. Please reach out to your bank or mortgage broker for a more precise estimate. The actual approvals from the mortgage broker may widely differ from our results due to differences in input, loan terms, current rates, underwriting standards, and your credit score, among other factors.

No record of this interaction or its results will be maintained.