Home affordability depends on income, debt, down payment, mortgage rate, property taxes, insurance, and the loan term. A house can look affordable by price alone but still create a monthly payment that is too high.
Start with the Mortgage Calculator. Enter the home price, down payment, interest rate, and loan term to estimate the monthly payment.
The 28% rule
A common rule is to keep your monthly housing payment near or below 28% of gross monthly income. This is only a guideline. Lenders also review total debts, credit score, employment history, and cash reserves.
USA vs Canada affordability factors
In the United States, buyers often need to consider PMI if the down payment is below 20%. In Canada, buyers may need mortgage default insurance when the down payment is below 20%.
Property tax rates, insurance costs, and closing costs also vary by location. Always compare local estimates before making an offer.
Related calculators
Use the Loan Calculator, Payment Calculator, and Amortization Calculator to compare different payment scenarios.
FAQ
Is a 30-year mortgage cheaper than a 15-year mortgage?
The monthly payment is usually lower, but the total interest paid over time is usually higher.
Should I buy at the maximum approval amount?
Not always. Leave room for repairs, moving costs, utilities, savings, and changes in income.