When you’re on the journey to homeownership, one of your first questions is often “How much house can I afford?” The answer depends on a lot of factors, including how much you’re comfortable paying each month, how much you make annually and the amount you have saved for a down payment.

The mortgage affordability calculator below can guide you into a range that you can comfortably afford to pay based on your personal situation. The mortgage calculator will gauge how much money you have to spend on a mortgage payment by evaluating the amount of your monthly income that goes toward paying existing debts. You may want to plan on spending less than what the calculator suggests so that you will have cash available in case of any unexpected repairs or financial emergencies.

Also, keep in mind when determining how much home you can afford, that buying a smaller house isn’t always a bad thing. Keeping your mortgage affordable and allowing room in the budget to continue to live the type of lifestyle you want is important. Another benefit to having an affordable mortgage is that you will have less stress if something major changes in your life, like job loss or a serious accident.

To help you better understand how to fill in the blanks in the mortgage calculator, use the following definitions and tips.

Annual incomeFill in the combined annual income for you and your co-borrower, if applicable. Make sure to account for all income before taxes, including bonuses and commissions, overtime pay, tips, etc. Income taxesIncome taxes areannual taxes that federal, state and local governments may place on individuals’ earnings. National income taxes average around 30% but may vary based on income level and location.
Down paymentYou will need anywhere from 3% to 20% of the purchase price saved for your down payment depending on the type of loan you using to purchase a home. Enter the amount you have saved for your down payment, and make sure you have some money set aside to cover unexpected repairs or financial emergencies. Property taxesThis mortgage calculator also includes estimated property taxes, and the value represents an annual tax on homeowners’ property. The tax amount is based on the home’s value.
Monthly debtIn this section you will want to include all monthly debts of you and your co-borrower, including: credit card and car payments, student loans, alimony/child support payments, other personal loans with periodic payments, etc.You will not need to include credit card balances that you pay off in full each month, or any existing house payment or rent that will not exist after you receive the mortgage to purchase your new home. Also, do not include the value of the new mortgage you are seeking. Homeowners insuranceAlso called hazard insurance, homeowners insurance provides protection for your home and personal property from a variety of events, including fire, burglary, and storms. Most lenders require that a homeowner carry insurance.
Interest rateThis section is pre-filled with the current 30-yr fixed average rate on Zillow Mortgage Marketplace. Your mortgage loan may not receive that same rate. Compare rates from hundreds of lenders in your area with our mortgage rate calculator. Mortgage insurance Also known as PMI (Private Mortgage Insurance), mortgage insurance is typically required for borrowers with a down payment of less than 20%. It protects lenders against losses that occur if a borrower defaults on their loan.
Debt-to-income (DTI)Your debt-to-income ratiois expressed as a percentage. You can determine this number by taking your total monthly debt divided by your gross monthly income. The conventional limit is 36% of your monthly income, but could be as high as 41% for FHA loans. Note: Having a DTI of 20% or less is considered excellent. HOA duesIf you buy a condo or townhome, you may be required to pay homeowners association dues, also known as HOA fees. These fees are used to cover amenities or services like garbage collection, landscaping and snow removal.
Loan termThere are many types of mortgage loans. The loan term is the length of time you choose to pay off your loan, like 30 years or 15 years.