How Much Can I Borrow? Use Our Mortgage Affordability Calculator

Before beginning your home search, it’s important to determine how much you can afford and the type of mortgage you may qualify for.

This mortgage eligibility calculator can help estimate your borrowing power.

Input a variety of rate, term and down payment scenarios to compare different options and then get ready to set your home buying journey in motion.

Annual Gross Income

Other Monthly Debt Payments

Down Payment

Term

Interest Rate

Property Tax (% of home price/year)

Homeowners Insurance ($/year)

Mortgage Insurance (% of loan/year)

HOA Fee (monthly)

Based on your inputs, you can afford a home up to

Estimated Monthly "Affordable" Payment Amount: $0

How Much Mortgage Can I Get Approved For?

How much mortgage you could be approved for depends on your income, debt, down payment, total monthly expenses and the type of mortgage. Our mortgage eligibility calculator crunches the numbers and helps you figure out the home loan amount you could qualify for.

How To Use Our Mortgage Eligibility Calculator

Ready to get a better understanding of how much house you could afford? Input the following information into each section of the mortgage eligibility calculator, then access your detailed results.

Annual Gross Income. Any consistent income you receive, such as income from your job or rental properties you may own.

Other Monthly Debt Payments. Recurring monthly loan expenses such as student, auto, and credit card payments.

Down Payment. The cash you plan to deposit toward the purchase of the home. The larger your down payment, the more you can afford.

Term. The period of your home loan, generally measured in years. Mortgage loan terms are typically 15 to 30 years, but Pennymac is proud to offer flex terms. We offer terms of 16 years, 17 years, 18 years and more on most loans.

Interest rate. The cost of borrowing money from a lender, expressed as a percentage of the loan amount.

Property Tax. A tax assessed on real estate by the local government, usually based on the value of the property (including the land) you own.

Homeowners Insurance. Usually required by lenders, homeowners insurance protects the homeowner from weather-related damage, as well as potential liability from events that occur on the property.

Mortgage Insurance. A protective fee, expressed as a percentage of the loan, that is typically required when your down payment is less than 20%. Requirements for this fee can vary significantly depending on your loan type (Conventional, FHA, or VA).

HOA Fee. The monthly amount paid to the Home Owners Association for community services and amenities, if applicable.

What Can I Borrow? Understanding Your Results

The mortgage eligibility calculator gives you an estimate of how much you could potentially borrow. Results are broken down into three categories:

Affordable estimate: Shows a home price and payment scenario using a lower (more conservative) debt-to-income ratio (DTI) which results in a lower home price, down payment and monthly principal and interest payments.
Stretch estimate: Shows a scenario using a moderate DTI which results in a moderate home price, down payment and monthly principal and interest payments.
Aggressive estimate: The maximum amount you may qualify for based on a higher DTI with a higher home price, down payment and monthly principal and interest payments.

Taxes and insurance costs are calculated based on the estimated home price in each scenario, meaning higher home prices result in higher monthly totals. Once you’ve found a monthly house payment that works for you, reach out to a Pennymac Loan Expert. They are happy to help walk you through the process.

Debt-to-Income Ratio (DTI) and Its Role in Mortgage Approval

Your debt-to-income ratio (DTI), like your credit score, plays a role in determining your mortgage eligibility.

DTI is the amount of recurring monthly debt you have compared to your monthly gross income. This figure helps lenders determine whether you can manage additional mortgage payments. A lower DTI can signal financial stability, making it easier to qualify for a home loan.

Most lenders prefer a DTI of 35% or lower, though some loan programs, like FHA and VA loans, allow for higher ratios. To calculate your DTI, total your monthly debts—such as mortgage, car payments and student loans—divide by your gross income and multiply by 100. A strong DTI can improve your loan options, potentially lowering interest rates and increasing approval odds.

In our calculator, affordable correlates to a 28% DTI, stretch to 36% and aggressive to a 43% DTI.

How To Qualify For a Mortgage

Now that you have an estimate of how much mortgage you can afford, it's important to understand the primary factors that influence your borrowing power. Borrowing power refers to the maximum amount a lender is willing to loan you. How do they assess this? Lenders consider more than just your income. They also evaluate the following:

Your credit score
Debt-to-income ratio
Proof of income and savings

Lenders will typically offer more favorable mortgage interest rates to homebuyers with lower debt obligations and higher credit scores.

What Can I Afford?

What you can comfortably afford vs. what you can borrow may be different. Your personal financial circumstances and goals can vary greatly from person to person. It’s important to take the time to assess your own financial situation, consider your short-term and long-term goals and make decisions that align with your personal situation and objectives.

For example, if you have aggressive college and retirement savings plans, will you be able to continue putting away money at that pace if you have a higher mortgage? If not, a mortgage below the max may be a better fit. Or perhaps you’re starting out in your career and anticipate that your income will significantly increase within a few years. The higher loan amount may be well within your comfort zone.

How Much Do I Need For a Down Payment?

While a 20% down payment can help you avoid the additional cost of Private Mortgage Insurance (PMI), there are loan programs, such as FHA loans, that have much lower minimum down payment requirements.

How Much Money Do I Need To Buy a House?

Most people looking to buy a primary residence can do so with 3.5%-5% down and potentially 0% down if you’re a qualified veteran. However, there are many other costs to consider, including:

Closing costs, which can range from 2%-6% of the home’s purchase price and cover fees for the home appraisal, title, mortgage origination and application
Mortgage payments, which also include taxes and insurance premiums
Prepaid costs that may go into an escrow account
Homeowners Association (HOA) fees, if applicable
Moving costs
Home repairs and maintenance
Furniture and home upgrades

Remember, you don’t need to exhaust all your cash on a down payment. If you have a good debt-to-income ratio and plan to stay in your new home a while, it might make sense to put down less and keep a reserve in savings.

A rule of thumb is that your total monthly mortgage payment and existing monthly debt obligations comprise no more than 36%-43% of your gross monthly income. Keep in mind that your mortgage payment includes your property taxes, insurance and, if applicable, mortgage insurance and/or monthly HOA dues.

When assessing your financial readiness for a home, it’s a good idea to also consider your savings. After closing and moving in, you should have some money left in savings to cover unexpected expenses that may arise.