Can you afford to buy?

Quick disclaimer: I'm no professional finance coach — just a regular person who wanted to make informed financial decisions and is also kind of a nerd. 🤓 Take this for what it is: a tool to help you think, not professional financial advice.

This calculator does the math on what it would actually cost you to buy a home — not just the mortgage payment, but everything: property taxes, insurance, HOA, maintenance, utilities, and the money you'd be tying up as a down payment instead of putting to work elsewhere. Fill in your details and hit "Calculate" to see a clear picture of your total upfront costs, monthly costs, the income you'd likely need, and where you'd stand financially over your chosen timeframe.

An excellent guideline is that your total monthly housing costs — including mortgage, taxes, insurance, and HOA — should not exceed 30% of your monthly take-home pay. However, this is a starting point, not a rule. The right answer depends on your other expenses, savings goals, job stability, and local cost of living. A more personalized approach is to add your projected housing costs to your current lifestyle spending and calculate the income needed to comfortably cover both.

The minimum down payment depends on your loan type: conventional loans can go as low as 3%, FHA loans require 3.5%, and VA and USDA loans may require no down payment for eligible buyers. However, putting down less than 20% typically triggers PMI, which adds $60–$200 or more per month depending on the loan size. A 20% down payment eliminates PMI and results in a lower monthly payment, but it requires significantly more upfront cash.

And the down payment is just one piece of what you'll need at closing — you'll also need to budget for purchase closing costs (typically 2–5% of the loan amount), moving and furnishing expenses, and two months of mortgage payments held in reserve. This calculator accounts for all four buckets in the Total Upfront Cost row of your results.

Beyond the mortgage payment, homeowners typically pay property taxes (often 1–3% of home value per year), homeowner's insurance, HOA fees, private mortgage insurance (PMI) if the down payment is under 20%, and 1–2% of the home's value annually in maintenance and repairs. Selling a home also costs roughly 6–8% of the sale price in agent commissions and closing costs. These costs are frequently underestimated and can add hundreds of dollars per month to the true cost of owning a home.

PMI stands for Private Mortgage Insurance. It's a monthly fee lenders require when your down payment is less than 20% of the home's purchase price. PMI protects the lender — not you — in case you default on the loan. Depending on your loan size and down payment, PMI typically costs $60–$200 per month. It's not permanent: once you've built 20% equity in your home (through payments and/or appreciation), you can request cancellation. It's automatically removed by federal law when your equity reaches 22%.

A mortgage payment in its most basic form consists of two components: Principal (the portion that reduces your loan balance) and Interest (the lender's fee for borrowing). Many lenders also collect property taxes and homeowner's insurance monthly through an escrow account — bundling all four into one payment, sometimes called PITI. HOA fees, while not part of the mortgage itself, are an additional fixed monthly cost for homes in managed communities. This calculator displays principal and interest as your mortgage payment, with taxes, insurance, HOA, and other costs broken out separately so you can see the full picture.

Closing costs are fees paid at the time of purchase, separate from your down payment. They typically include loan origination fees, title insurance, appraisal fees, attorney fees, prepaid interest, and government recording fees. For buyers, closing costs generally run 2–5% of the loan amount. On a $300,000 home with 20% down, that's roughly $4,800–$12,000 in addition to your $60,000 down payment. Your lender is required to provide a Loan Estimate within three business days of your application so you can see the specific numbers before committing.

Compared to other long-term investments, a primary residence is actually a pretty poor performer. Home values historically grow at roughly the rate of inflation — meaning your home isn't really gaining purchasing power over time, it's mostly keeping pace. That said, homeownership does build equity — a form of forced savings that many people wouldn't otherwise maintain — and that's genuinely valuable. And it's not worth locking yourself into a mortgage you can't afford just to open what is effectively a savings account. The honest framing is: a primary home is a savings vehicle with some lifestyle benefits, not an investment. Go in with that expectation and you won't be disappointed.

Your debt-to-income ratio (DTI) is the percentage of your gross monthly income that goes toward monthly debt payments — including your mortgage, car loans, student loans, credit cards, and any other recurring debt obligations. Lenders use it as one of the primary measures of whether you can actually afford to take on a mortgage.

Most conventional lenders prefer a DTI of 43% or lower, though some will go higher with compensating factors like a large down payment or strong credit. Many lenders prefer your housing costs alone (called the "front-end" DTI) to stay under 28–31% of gross income.

DTI is worth knowing before you start shopping. If your current debt load is high, paying down existing balances before applying for a mortgage can meaningfully expand the loan amount you qualify for — and reduce the rate you're offered.

Your credit score is one of the biggest levers on your mortgage interest rate. Lenders use it to assess how likely you are to repay the loan — and they price their rates accordingly. The difference between a 680 and a 760 credit score can mean 0.5–1.0% or more in rate, which compounds significantly over a 30-year loan.

To give a concrete example: on a $300,000 loan at 7.5% vs. 6.5%, the difference in monthly payment is roughly $200/month — and over 30 years, that's more than $70,000 in additional interest. A higher credit score doesn't just feel good; it has a real dollar impact on affordability.

Lenders typically look at FICO scores from all three bureaus and use the middle score. Most conventional loans require a minimum of 620, but to access the best rates, you generally want to be above 740. If your score is lower than you'd like, spending 6–12 months paying down revolving debt and avoiding new credit inquiries before applying can make a meaningful difference.

This calculator is a free, open resource. If you have feedback, a bug to report, an idea for improvement, or want to share how this page has helped you, the best way to share it is via GitHub Discussions — that way others can see, vote on, and build on your ideas too.

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