What Is BuyAbility?

If you’re like many home shoppers, you probably started your home search by browsing Zillow® listings until one caught your eye and made you think, “Can I buy that?” 

Zillow Home Loans’ BuyAbility℠ tool answers that question for you in real time. BuyAbility is one of several tools available through Zillow that can help you calculate a budget for a house. But it goes far beyond what a static calculator can do: BuyAbility connects your personal financial picture with current mortgage rates, showing you how changes in rates affect the amount you can afford to spend on a home at your desired monthly mortgage payment. It also lets you shop for homes based on what you can afford.

“The most crucial factor for buyers is understanding their budget and how much they can afford,’’ says Jeremy Ellis, a mortgage loan officer with Zillow Home Loans. “BuyAbility addresses this by offering real-time insights into mortgage rates, allowing buyers to see their purchase power and adjust their home search accordingly.”

How to get started with BuyAbility

To get started with BuyAbility, all you need to do is complete an initial setup by entering a few data points. Once you’re set up, the tool provides you with ongoing insights into homes you would likely qualify for and estimates of what you would pay each month to own those homes.

1. Navigate to our BuyAbility tool to get started.
2. You’ll be prompted to enter some basic financial information – your monthly payment target, amount available for a down payment, annual income before taxes, monthly debts and credit score. And that’s it. 

BuyAbility will show you a suggested target price for a home based on your preferred monthly payment, plus the maximum amount you would likely qualify for with a lender, given current interest rates. As rates change, or you adjust the details in your financial picture, so, too, will those amounts. 

If you’re saving for the future, the tool will grow with you, providing you with new options as your finances change.

When you’re on the Search Results page scrolling, you’ll be able to look for homes with the “Within BuyAbility” tag. These are the homes you can afford based on your BuyAbility calculation. Each home listing will show whether it falls within your BuyAbility. It also shows what your monthly mortgage payment would be to buy that home.

Return to your BuyAbility over time to see if it’s changed based on automatically updated mortgage rates. You can update the tool with new financial information any time.

How does BuyAbility work?

BuyAbility gives you a customized mortgage rate and a personalized estimate of your home-buying budget by matching the financial information you provide with daily interest rates powered by Zillow Home Loans. 

How to calculate BuyAbility

From the Zillow Homes Loans tab on the Zillow app or on your desktop, enter the state where you’d like to buy, your income, down payment amount, credit score and the monthly amount you’re comfortable spending. An estimate of the home price and monthly payment that fits within your budget will pop up, along with insight into your likelihood of getting approved for a mortgage at that price point. You can update your financial details any time to see how changes to those details affect your buying power now or in the future.

Experts generally recommend that you spend no more than a third of your income on housing. Staying below that target helps ensure that you have money for other necessities and fun.

How much is my BuyAbility?

Your BuyAbility depends on your unique financial portfolio and the housing market. Mortgage rates play a big role in determining your monthly payment and how much you can afford to spend on a home. The second part of the equation is your credit score. The better your score, the better the rate the lender is likely to offer you, and the more likely you are to qualify for a mortgage.

For example, let’s say you’re a median-income household who can put 20% down on a home purchase. If you took out a fixed-rate, 30-year mortgage at 6.5%, you could afford a $400,000 home. If rates dropped to 6%, your buying power would jump to $420,000 for about the same monthly payment. 

How to improve your BuyAbility

You can improve your BuyAbility by managing your debts, saving for a larger down payment and raising your credit score. Typically, the higher your credit score, the better the interest rate you’ll qualify for, so improving your score could save you hundreds of dollars a month.

“The time it takes to see improvements can vary,’’ says Ellis. “Some changes, like paying down credit card balances, might show results within a few weeks, while others, like building credit history, may take several months.”

Eliis says one option for building your credit is to explore programs like Experian Boost, which allows you to improve your credit profile and credit score by adding on-time payments for rent and utilities to your credit report. If you do add rent and utilities, he says neither will be counted as debts when your loan officer calculates your debt-to-income ratio when exploring loan options.

How does your credit score and current mortgage rates impact your BuyAbility?

Real-time information is vital when budgeting for a home, because even the smallest change in mortgage rates or your credit score can impact the amount you qualify for and your home buying power.

Mortgage lenders use your credit score and other financial factors to assess how likely you are to repay a home loan. Home buyers with a stronger credit profile generally qualify for better mortgage rates and loan terms. A change in your finances, such as paying off a large purchase or getting a raise, can improve your credit score, which may result in lower monthly mortgage payments. On top of this, mortgage rates can fluctuate daily based on market conditions. If rates are high, a favorable credit score may be just what you need to stay within your home buying budget.

 “If the mortgage market is particularly volatile, we can see multiple changes in one day,’’ says Ellis. Regular updates ensure that buyers have the latest information to make informed decisions, avoid surprises, and secure the most favorable loan terms.”

How often should I check my BuyAbility?

Zillow Home Loans’ mortgage loan officers recommend checking the BuyAbility tool regularly — preferably weekly.

Ellis says, “Using it proactively helps buyers stay informed about their financial status and adjust their home search or financing plans as needed”.

Why is checking BuyAbility important?

A major misconception is that a high credit score alone guarantees a mortgage approval or the best rates. BuyAbility provides a holistic view of your financial situation, including how credit scores, income, and other factors interact, which can help you see all the elements that influence your mortgage options.

Can I share the information on BuyAbility with my loan officer and real estate agent?

BuyAbility gives you essential financial insights you can share with your loan officer and agent, says Ellis.

“The loan officer can use this information to offer customized loan options, while the agent can tailor the home search based on your financial readiness,’’ he says. “You, the buyer, control when and how the information is shared with your team, ensuring that collaboration occurs at the right stage of the process and at a pace you're comfortable with.”

Do I still need to get pre-qualified if I’m using BuyAbility?

Yes. BuyAbility can help focus your home search and build confidence that you’re looking at homes you can afford, given the larger context of your financial picture and current mortgage rates.

BuyAbility is a powerful estimate based on credit information that you input into the tool. It automatically updates when interest rates change or when you input new financial information.

Pre-qualification is the next step, where a lender gives you a one-time estimate of what you might be able to borrow based on your self-reported information. Getting pre-qualified with Zillow Home Loans does not affect your credit score, and can help you shop for homes in your budget. 

Pre-approval is even more specific and timely. With pre-approval, a lender verifies your financial information and conducts a credit check before issuing you a conditional letter that says they will lend you a certain amount for a mortgage based on certain conditions.

Getting pre-qualified or pre-approved helps prepare you to make an offer on a home since it telegraphs to the seller that you have the financial means to buy a home up to a certain price.

What’s the difference between BuyAbility and Zillow’s Affordability Calculator? 

The Affordability Calculator gives you a one-time estimate of what you can comfortably afford to spend on a home based on details you enter about your income, down payment and monthly debts.

BuyAbility uses current mortgage rates tailored to your location, credit score and loan amount, and thus shows a more accurate view of your home buying budget and your mortgage loan options. Unlike the Affordability Calculator, BuyAbility saves your inputs and adjusts your budget in real-time with the mortgage market. You can also update your financial information to ensure your home buying budget reflects your most current situation. 

Checking BuyAbility regularly will give you a clear and current understanding of your financial picture at any given moment.