Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: Oct 21, 2021

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Have you ever wondered how expensive of house you could afford?

Home affordability calculators are designed to let borrowers know how much of a mortgage loan they can afford at their current wages and outstanding debt.

By filling out items like one’s monthly income (or combined monthly income for couples), size of a down payment, total outstanding debts (other loans, cell phone bills, utilities, insurance bills, etc.), expected interest rate, and term (duration), borrowers will be given an idea of what kind of mortgage loan they can afford.

If available, property tax and homeowner’s insurance fields should be filled out for a more accurate home affordability calculation.

The national average property tax on a 30-year home loan is around $3,500 per year. Similarly, the national average cost of homeowner’s insurance is nearly $500 per year. If you do not know what the taxes and insurance costs are for the property you’re interested in, feel free to input these national averages so that you can get a more accurate depiction of your affordability level.

These calculations are usually based on a 36 percent debt-to-income ratio since most lenders will not allow borrowers to spend more than 36 percent of their monthly income (minus recurring bills) on a home mortgage loan.

By completing a mortgage affordability calculator, borrowers can better budget their finances and approach lenders with an educated and informed prediction of what they can afford. If you find you can afford a mortgage at a certain level, feel free to complete the home loan application that appears at the bottom of your results.