First-Time Home Buyer Calculator
Buying a home involves more than just the mortgage payment. First-time buyers often underestimate total upfront costs, property taxes, insurance, and PMI. This calculator gives you the complete picture — upfront cash needed, full monthly cost, and income required to qualify.
Enter the home price, your down payment, and local costs to see everything you need to budget for as a first-time buyer.
What First-Time Buyers Often Miss
Most first-time buyers focus on the mortgage payment. The full monthly cost of homeownership — called PITI — includes principal and interest, property taxes, homeowners insurance, and PMI if your down payment is under 20%. The difference is significant: a $2,661 P&I payment on a $400,000 mortgage becomes $3,300–$3,500/month with taxes, insurance, and PMI added.
The upfront costs surprise many first-time buyers. A $400,000 home with 5% down requires: $20,000 down payment + $11,400 estimated closing costs (at 3%) + approximately $5,600 in cash reserves = $37,000 in total upfront cash. This is well beyond what many buyers realize, particularly those who've only budgeted for the down payment.
Down Payment Options and Trade-Offs
3–3.5% down: Makes homeownership accessible sooner. Higher PMI cost ($150–$250/month typically) adds to monthly payment. FHA loans (3.5% down) have lifetime mortgage insurance premium for most borrowers — unlike conventional PMI which ends at 20% equity.
5–10% down: Lower PMI rate. PMI automatically cancels at 78% LTV (can request at 80%). More accessible than 20% while avoiding FHA's lifetime MIP.
20% down: No PMI. Lower rate often. But requires the most upfront cash — $80,000 on a $400,000 home, plus closing costs.
Income Required: The 28/36 Rule
Most lenders use two DTI thresholds: front-end DTI (housing costs only) should not exceed 28% of gross monthly income, and back-end DTI (all debts) should not exceed 36%–43%. The front-end limit is the binding constraint for first-time buyers with minimal other debt. To qualify at 28% front-end: Monthly income needed = Total PITI ÷ 0.28.
For a complete guide to the first-time home buying process, read our first-time home buyer guide. For a comparison of down payment options in detail, see down payment options: 3%, 5%, 10%, 20%.
Frequently Asked Questions
How much do I need saved to buy my first home?
For a $400,000 home with 5% down: $20,000 down payment + ~$11,400 closing costs (3% of loan) + ~$6,600 reserves (2 months PITI) = approximately $38,000 total. With 20% down: $80,000 + ~$9,600 closing costs + reserves = approximately $95,000+. Use this calculator with your specific purchase price for a personalized estimate.
What income do I need to buy a $400,000 house?
At 7%, 5% down: approximately $2,530 P&I + $367 taxes + $150 insurance + $200 PMI = ~$3,250/month PITI. At 28% DTI: $3,250 ÷ 0.28 = $11,607/month gross income needed, or ~$139,000/year. With existing debts, requirements are higher. Use this calculator for your specific numbers.
What is PITI?
PITI = Principal + Interest + Taxes + Insurance. It's your total monthly housing cost, which lenders use for DTI calculations. For first-time buyers with under 20% down, add PMI to get your true monthly payment. PITI is always higher than just the mortgage payment — often by $400–$800/month for typical properties.
What are first-time buyer programs?
FHA loans (3.5% down, lower credit score requirements), Conventional 97 (3% down), USDA loans (0% down in rural areas), VA loans (0% down for veterans), and state HFA programs offering down payment assistance. These can reduce upfront cash requirements by $10,000–$30,000. Search "[Your State] HFA first-time buyer" to find state-specific programs.
When can I remove PMI?
For conventional loans: request cancellation when you reach 20% equity based on the original purchase price (or appraise at 80% LTV). Lenders must automatically cancel at 78% LTV based on scheduled payments. FHA loans originated after 2013 with under 10% down have lifetime mortgage insurance premium — refinancing to conventional once you have 20% equity is the only way to eliminate it.
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