Affordability calculator help
"How much house can I afford?" is a question we hear frequently from those looking to purchase a new home. The mortgage you can afford depends on many factors, including your target monthly payment, annual income, and down payment amount.
Zillow's mortgage affordability calculator helps you determine what you can comfortably afford to pay based on your personal circumstances. It evaluates the percentage of your monthly income that goes toward existing debts to help identify how much extra you have to spend on a mortgage payment. Your remaining income after debt and taxes should be enough to cover living expenses and savings goals, and it is wise to have some cash set aside to accommodate any unexpected repairs or financial emergencies.
- Annual income
- This is the combined annual income for you and your co-borrower. Include all income before taxes, including base salary, commissions, bonuses, overtime, tips, rental income, investment income, alimony, child support, etc.
- Down payment
- This is the amount of money you will put towards a down payment on the house. Make sure you still have cash left over after the down payment to cover unexpected repairs or financial emergencies.
- Monthly debt
Include all of you and your co-borrower's monthly debts, including: minimum monthly required credit card payments, car payments, student loans, alimony/child support payments, any house payments (rent or mortgage) other than the new mortgage you are seeking, rental property maintenance, and other personal loans with periodic payments.
Do NOT include: credit card balances you pay off in full each month, existing house payments (rent or mortgage) that will become obsolete as a result of the new mortgage you are seeking, or the new mortgage you are seeking.
- Interest rate
- This is the interest rate for the loan you will receive. It is pre-filled with the current 30-yr fixed average rate on Zillow Mortgages.
- Debt-to-income (DTI)
- Your DTI is expressed as a percentage and is your total "minimum" monthly debt divided by your gross monthly income. The conventional limit for DTI is 36% of your monthly income, but this could be as high as 41% for FHA loans. A DTI of 20% or below is considered excellent.
- Income taxes
- This is an annual tax that governments place on individuals' income. It includes federal tax, most states and some local entities. The national average is around 30% but can vary based on income, location, etc.
- Property taxes
- The mortgage payment calculator includes estimated property taxes. The value represents an annual tax on homeowners' property and the tax amount is based on the home's value.
- Homeowners insurance
- Commonly known as hazard insurance, most lenders require insurance to provide damage protection for your home and personal property from a variety of events, including fire, lightning, burglary, vandalism, storms, explosions, and more. All homeowner's insurance policies contain personal liability coverage, which protects against lawsuits involving injuries that occur on and off your property.
- Mortgage insurance (PMI)
- Mortgage insurance is required primarily for borrowers with a down payment of less than 20% of the home's purchase price. It protects lenders against some or most of the losses that can occur when a borrower defaults on a mortgage loan. Also known as PMI (Private Mortgage Insurance).
- HOA dues
- Typically, owners of condos or townhomes are required to pay homeowners association dues (known as HOA fees), to cover common amenities or services within the property such as garbage collection, landscaping, snow removal, pool maintenance, and hazard insurance.
- Loan term
- This is the length of time you choose to pay off your loan (e.g., 30 years, 20 years, 15 years, etc.)
- Full report
- Click on the Full Report link to see a printable report that includes mortgage payment breakdowns, total payments, and a full mortgage payment amortization calculation (table and chart). Amortization table includes ability to view amortization by year or by month.