Can You Afford to Buy a Home?

Home affordability is typically calculated using the 28/36 rule. This means your monthly housing costs (mortgage, taxes, insurance) should not exceed 28% of your gross monthly income, and your total debt payments (including housing) should not exceed 36% of your income. Our calculator factors in your income, debts, down payment, and local costs to give you a realistic estimate.

Your monthly mortgage payment typically includes four components, often referred to as PITI: Principal (the amount borrowed), Interest (cost of borrowing), property Taxes, and Insurance (homeowners and possibly mortgage insurance). Additionally, if applicable, HOA fees would be paid separately.

The rent vs. buy decision depends on various factors including how long you plan to stay in the home, local market conditions, your financial situation, and lifestyle preferences. Generally, buying becomes more financially advantageous the longer you stay in a home. Use our Rent vs. Buy comparison tool to analyze your specific situation.

While 20% down is often recommended to avoid Private Mortgage Insurance (PMI), many buyers put down less. FHA loans allow for as little as 3.5% down, and some conventional loans start at 3%. Consider your financial goals: a larger down payment means a smaller loan and lower monthly payments, but you also need to maintain emergency savings and consider other financial goals.