How much house can you really afford?

Home buying · 10 minutes read · Money guidance team

Lenders will tell you the largest loan you qualify for. That is not the same as the payment you can live with. Work backwards from a monthly figure that leaves room for savings, repairs and the rest of life.

Count the whole payment

Principal and interest are only part of it. Add property tax, homeowners insurance and any association dues. If you put down less than 20%, add mortgage insurance too. The home loan calculator includes each of these.

Check before you shop

Keep housing near 30% of take-home pay, or less.
Hold three to six months of expenses in cash after closing costs.
Ask for a prequalification so you know your rate range before you tour.