Housing Affordability

How Much House Can You Afford?

Calculate your mortgage payment and find out if a home is within your budget using the 28/36 rule

The 28/36 Rule

28%

Housing Costs

Max 28% of gross monthly income on housing (PITI: Principal, Interest, Taxes, Insurance)

36%

Total Debt

Max 36% of gross income on all debt (housing + car + student loans + credit cards)

What is PITI?

P
Principal
The amount that goes toward paying off your loan
I
Interest
The cost of borrowing money from the lender
T
Taxes
Property taxes (usually 1-2% of home value/year)
I
Insurance
Homeowner's insurance to protect your investment

Down Payment Guide

Conventional 20% ideal

FHA Loan 3.5% minimum

VA Loan 0% down

Less than 20% down typically requires PMI (Private Mortgage Insurance)

Mortgage Calculator

Annual Gross Income Your yearly income before taxes

Home Price

Down Payment

Interest Rate Annual interest rate on the mortgage

Loan Term

Property Tax Rate (annual)

Rent vs. Buy: Key Considerations

Renting May Be Better If...

You plan to move within 3-5 years
You need flexibility for job changes
You don't have savings for down payment + emergency fund
Rent is significantly cheaper than buying in your area
You want to avoid maintenance responsibilities

Buying May Be Better If...

You plan to stay 5+ years
You have stable income and job security
You have 20% down + 6 months emergency fund
You want to build equity and wealth
Monthly payment fits the 28/36 rule comfortably

Frequently Asked Questions

20% is ideal to avoid PMI (Private Mortgage Insurance). However, many first-time buyers put down 5-10%. FHA loans require just 3.5% down, and VA loans offer 0% down for eligible veterans.

Beyond PITI, budget for: closing costs (2-5% of loan), HOA fees, maintenance (1% of home value/year), utilities, and moving expenses. Keep 6 months of expenses as an emergency fund.

15-year mortgages have lower rates and save huge interest, but higher payments. 30-year mortgages offer lower payments and flexibility. Choose 30-year if you want payment flexibility but can make extra payments when possible.

Conventional loans typically need 620+, but 740+ gets the best rates. FHA loans accept scores as low as 580 (or 500 with 10% down). VA and USDA loans don't have minimum scores but lenders typically want 620+.