Explore more mortgage calculators
Mortgage calculator
What will your new home cost? Estimate your monthly mortgage payment with our easy-to-use mortgage calculator.
VA Mortgage Calculator
Use our VA home loan calculator to estimate payments for a VA loan for qualifying veterans, active military, and military families.
Debt-to-Income Calculator
Your debt-to-income ratio helps determine if you would qualify for a mortgage. Use our DTI calculator to see if you're in the right range.
Refinance calculator
Interested in refinancing your existing mortgage? Use our refinance calculator to see if refinancing makes sense for you.
Participating lenders may pay Zillow Group Marketplace, Inc. ("ZGMI") a fee to receive consumer contact information, like yours. ZGMI does not recommend or endorse any lender. We display lenders based on their location, customer reviews, and other data supplied by users. For more information on our advertising practices, see our . ZGMI is a licensed mortgage broker, NMLS #1303160. A list of state licenses and disclosures is available here.
Factors that impact affordability
When it comes to calculating affordability, your income, debts and down payment are primary factors. How much house you can afford is also dependent on the interest rate you get, because alower interest ratecould significantly lower your monthly mortgage payment. While your personal savings goals or spending habits can impact your affordability,getting pre-qualified for a home loancan help you determine a sensible housing budget.
How to calculate affordability
Zillow's affordability calculator allows you to customize your payment details, while also providing helpful suggestions in each field to get you started. You can calculate affordability based on your annual income, monthly debts and down payment, or based on your estimated monthly payments and down payment amount.
Our calculator also includes advanced filters to help you get a more accurate estimate of your house affordability, including specific amounts of property taxes, homeowner's insurance and HOA dues (if applicable). Learn more about the line items in our calculator to determine your ideal housing budget.
Annual income
This is the total amount of money earned for the year before taxes and other deductions. You can usually find the amount on your W2 form. If you have a co-borrower who will contribute to the mortgage, combine the total of both incomes to get your annual income.
Total monthly debts
These are recurring monthly expenses like car payments, minimum credit card payments or student loans. You can adjust this amount in our affordability calculator as needed. For example, if you have a $250 monthly car payment and $50 minimum credit card payment, your monthly debt would be $300.
Down payment
The amount of money you spend upfront to purchase a home. Most home loans requirea down payment of at least 3%. A 20% down payment is ideal to lower your monthly payment, avoid private mortgage insurance and increase your affordability. For a $250,000 home, a down payment of 3% is $7,500 and a down payment of 20% is $50,000.
Debt-to-income ratio (DTI)
The total of your monthly debt payments divided by your gross monthly income, which is shown as a percentage. Your DTI is one way lenders measure your ability to manage monthly payments and repay the money you plan to borrow. Our affordability calculator will suggest a DTI of 36% by default. You can get an estimate of your debt-to-income ratio using ourDTI Calculator.
Interest rate
The amount that a lender charges a borrower for taking out a loan. Typically, the interest rate is expressed as an annual percentage of the loan balance. The borrower makes payments (with interest) to the lender over a set period of time until the loan is paid in full. Our affordability calculator uses the current national average mortgage rate. Your interest rate will vary based on factors like credit score and down payment. Calculate yourmortgage interest rate.
Loan term
The length by which you agree to pay back the home loan. The most common term for a mortgage is 30 years, or 360 months, but different terms are available depending on thetype of home loanthat works best for your situation. You can edit your loan term (in months) in the affordability calculator's advanced options.
Property tax
When owning a home, you pay annual property taxes based on the assessed value of the property or purchase price of the home, which can affect your affordability. The tax rate you pay can vary by state, county and municipality. Our calculator assumes a property tax rate by default, but you can edit this amount in the calculator's advanced options. To obtain a more accurate total payment amount,get pre-qualified by a lender.
Homeowner's insurance (HOI)
Also known as homeowner's insurance is atype of property insurancethat covers a private residence. Typically, HOI is required to get a home loan. The cost may vary depending on your location, type of coverage, any discounts you qualify for and your insurance provider. Generally, homeowner's insurance costs roughly$35 per month for every $100,000of the home's value. Consult your insurance carrier for the exact cost. You can edit the calculator's default amount in the advanced options.
Private mortgage insurance (PMI)
Many lenders commonly require private mortgage insurance if a borrower contributes less than a 20% down payment on a home purchase. PMI protects the lender against losses that may occur when a borrower defaults on a mortgage loan. Our calculator bases the PMI on the home price and down payment amount. You can choose to include or exclude PMI in the advanced options of the affordability calculator.
Homeowner's Association (HOA) dues
Some communities, such as condominiums and townhomes, are governed by a homeowner's association (HOA) that maintains communal areas and enforces rules and regulations for a monthly fee. Any HOA dues you pay each month can affect your affordability. You can edit this number in the affordability calculator advanced options.
How much mortgage can I qualify for?
Lenders have apre-qualification processthat takes your finances (such as income and debt) into account to determine how much they are willing to lend you. Once the lender has completed a preliminary review, they generally provide a pre-qualification letter that states how much mortgage you qualify for. Get pre-qualified by a lender toconfirm your affordability.
Most affordable markets for homebuyers
According to 2020 data fromZillow Research, record low mortgage rates have helped to boost affordability for potential homeowners. The table below shows the top 10 most affordable markets to live in (among the nation's 50 largest) for December 2020 and is based on a typical home value of no more than $300,000 (the typical U.S. home value is about $270,000). The market and share of income spent on a mortgage may fluctuate based on the current mortgage rate, the typical local homeowner's income and the typical local home value.
| Market | Share of Income Spent on Mortgage | Zillow Home Value Index (December 2020) |
|---|---|---|
| Birmingham, AL | 12.4% | $186,523 |
| Oklahoma City, OK | 12.6% | $168,880 |
| Indianapolis, IN | 12.7% | $202,370 |
| Louisville-Jefferson County, KY | 12.9% | $196,330 |
| Memphis, TN | 13.0% | $171,488 |
| Cincinnati, OH | 13.2% | $205,977 |
| Pittsburgh, PA | 13.2% | $175,882 |
| St. Louis, MO | 13.5% | $195,380 |
| Cleveland, OH | 13.8% | $173,637 |
| Milwaukee, WI | 14.0% | $217,160 |
Frequently asked questions about affordability
How much house can I afford?
How much house can I afford with an FHA loan?
How much house can I afford with a VA loan?
How much should I spend on a house?
Related Articles
Low down payment mortgages
Looking for a low down payment home loan? Here's a look at home loan options that allow for down payments of 3.5% or less.
How to qualify for a mortgage
When you apply for a loan, a lender will scrutinize your financial situation to make sure you qualify. Here's what they're looking for.
Buying with bad credit
If you have bad credit and fear you'll be denied for a mortgage, don't worry. You may still be able to get a loan with a low credit score.
