Buying a home is a complicated and life-changing decision you shouldn’t take lightly, considering the average mortgage is 30 years. If you already own a home and want to upgrade, you’ll need to know how much yours is worth. Tap or click here to find out the actual value of your house for free. No matter the situation, when you’re ready to buy a house, you need to know how much you can afford. Stop wondering and use this free online calculator to determine how much home you can afford.

What goes into the cost of a home?

It’s easy to browse through Zillow and see a home for $250,000 and think, hey, I can probably afford that. Maybe you can afford that, but the list price is never the actual price of a home. Dozens of other factors and costs get compounded into the list price, and they can add up. RELATED: 5 ways to improve your home’s Zestimate on Zillow


You didn’t think the bank would let you borrow all that money for free, did you? Outside of finding a generous benefactor, you’ll need to take out a loan to buy your dream home. This means you’ll have to pay interest on the amount you borrow. Depending on the life of the loan, how much you put down and the interest rate, you could pay double the cost of the home in the long run. This also affects your monthly payment.

Closing costs

If you’ve heard that lawyers are expensive, you don’t know the true meaning of that statement until you purchase a home. Closing costs come with every sale, typically ranging from 2 to 5% of the home’s overall price. A portion of closing costs go to lawyers helping facilitate the deal, and they don’t come cheap.

Property Tax

Another sneaky hidden fee associated with buying a home is property tax. This also gets added to your monthly payment, which can vary widely depending on where you purchase a home because each city determines its tax rate.

The online mortgage calculator

If all that information seems complicated, there is an online tool to make it simple. The Penny Hoarder uses details like insurance, PMI, and length of the loan to help determine how much your monthly mortgage would be. The calculator guides you on how much of your salary should be allocated to a mortgage. Spoiler alert: It’s 25%. This free tool uses your monthly take-home pay, size and terms of the loan, how much money you have for a down payment and factors in hidden costs to determine how much you can afford. Check it out so you know before making this life-changing purchase. Tap or click here to access The Penny Hoarders Free Online Mortgage Calculator.