How to Calculate How Much House I Can Actually Afford

Thank you for sharing!

First time homebuyers, and even experienced homebuyers who may be buying in a new area or buying into a higher price point, often ask me how much house they can really afford or how much of their income their mortgage should be. The key to answering these questions is understanding that the total cost of homeownership includes a lot more than just your monthly mortgage payment. To answer it, let’s take a look at how to calculate how much house I can afford.

Thank you for sharing!

About Meghan

Meghan spent nearly a decade as a Financial Analyst, before spending the last 7+ as a SAHM to three little ones. She shares simple money tips for moms to help your family reach your financial goals by building a financial plan you can LIVE with! You can learn more about her background in finance, catch her daily on Instagram and Facebook, and her weekly live discussions in her community for Family Finance Moms.


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  4. Kathryn on November 7, 2021 at 12:00 pm

    To be clear – the mortgage payment estimated here only includes principal and interest? Just confirming because I thought a mortgage payment typically includes insurance and taxes too.

    • Meghan on November 10, 2021 at 1:54 pm

      Keep reading… those are broken down in the second calculation. Also, mortgage payments only include insurance and taxes if you choose or are required to escrow for them (meaning the bank collects them monthly and pays the bill when it is due 1-2x a year). They aren’t automatically included in all mortgage payments, but are definitely an additional, and sizeable part, of the cost of home ownership.

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