How Much House Can I Afford in Tampa Bay?

If you're starting a home search in Tampa Bay, the first question is usually "how much house can I afford?" There are two answers: what a lender will approve, and what you can comfortably live with. The gap between them can be hundreds of dollars a month.

Most buyers are comfortable when their full monthly housing cost (mortgage, property taxes, insurance, and any HOA or CDD fee) stays around 28% of their gross income. In Tampa Bay, homeowners and flood insurance can move that number as much as your interest rate does, so always include them when you estimate the monthly payment on a home you're considering.

The calculator at the bottom of this page runs both numbers for you.

Two numbers: comfortable vs. approved

Your comfortable number uses the classic 28% rule: your total house payment stays at or below about 28% of what your household earns before taxes. That leaves room for savings, car repairs, vacations, and everything else.

Your lender's maximum is based on your debt-to-income ratio, or DTI. That's all of your monthly debt payments, including the new house payment, divided by your gross monthly income. Many lenders cap it around 43%, and some loan programs go higher.

Here's what that looks like with the calculator's starting numbers: a $120,000 household income, $600 a month in other debt, 20% down, and a 6.5% interest rate. The comfortable price comes out around $416,000. A lender could approve up to about $571,000. Buying at the top of that range would cost roughly $900 more every month. Rates move from week to week, so use the rate a lender quotes you when you run your own numbers. Our guide to rising mortgage rates covers what the latest increase means for buyers.

Use the comfortable number to set your search.

What goes into a Tampa Bay house payment

Your monthly payment is more than the loan. Here's what to budget for:

• Principal and interest. The loan itself, usually paid over 15 or 30 years.
• Property taxes. Don't budget off the seller's tax bill. In Florida, a home's assessed value resets when it sells, so your bill may be noticeably higher than what the current owner pays. If the home will be your primary residence, the homestead exemption lowers the bill. You must own and live in the home on January 1, and you file with your county property appraiser by March 1. Our guide to the Florida homestead exemption walks through the filing.
• Homeowners insurance. It's often the biggest surprise. The roof's age, the home's hurricane protection, and its distance from the water all affect the price. Get a quote on the specific home as early as you can. Our guide to Florida home insurance explains what insurers look at.
• Flood insurance. If the home is in a high-risk flood zone and you're financing, your lender will require it. Even outside those zones, it's worth getting a price. Our guide to flood zones explains how to check a home's zone.
• HOA or CDD fees. Many newer communities around Tampa Bay have a CDD (community development district) fee, usually billed with your property taxes. It can add a noticeable amount to your monthly cost, so know the numbers before you fall in love with a house. Our guide to CDD fees shows how to check for one.
• Mortgage insurance (PMI). Put less than 20% down on a conventional loan and you'll likely pay PMI until you've built enough equity to drop it.

With the calculator's starting numbers, taxes and insurance make up about a quarter of the monthly payment, which is why two homes at the same price can cost very different amounts each month.

How to use the calculator

1. Add your income and debts. Use your household income before taxes. For debts, include car loans, student loans, and credit card minimums. Leave out utilities and groceries.
2. Set your down payment. Under 20%, the calculator adds mortgage insurance for you.
3. Update the interest rate. Use what lenders are quoting today.
4. Swap in local costs. Adjust property tax, homeowners insurance, flood insurance, and any HOA or CDD fee. If you have a specific home in mind, use its numbers.
5. Compare the two results. Look at the comfortable price, the lender maximum, and the cash to close for each.

Tip: run it a second time with a higher insurance number. If the payment still works, you have breathing room.

Plan for the cash you need at closing

Your down payment isn't the only money you'll need to bring to the closing table. Closing costs are typically 2% to 5% of the purchase price, and it's smart to keep a cushion for moving, small repairs, and a few months of payments in savings. The Loan Estimate your lender sends after you apply will show your exact closing costs.

Ways to get more house for your budget

• Shop insurance early. Ask about wind mitigation discounts. A short inspection that documents hurricane features like roof straps and impact windows can lower your premium.
• Compare flood zones. Two similar homes a few streets apart can have very different flood insurance costs. Check the zone for every home on your list.
• Watch for CDD fees. A lower-priced home with a CDD fee can cost more each month than a pricier one without.
• Pay down a monthly debt well before you buy. Paying off a car loan or credit card lowers your DTI and can raise what a lender will approve. Do it months ahead, and ask a lender first. Once you're in the buying process, hold off on big financial moves. Paying off a car mid-process can backfire: if your lender counted that cash as savings or money for closing, spending it can cost you the loan.
• Ask about down payment help. Florida and several Tampa Bay counties offer assistance programs for eligible buyers, especially first-time buyers. Our first-time buyer's guide covers where to start.
• Compare lenders. Rates and fees vary. It's time well spent to talk with two or three lenders and get a quote from each.

Weighing whether to keep your current home as a rental instead of selling it? Our sister company Tampa Bay Rentals covers renting it out versus selling.

Ready to start looking?

Once you have your comfortable number, use it as your max price and browse Tampa Bay homes on the map.

Want a second set of eyes on your numbers? Send us a message and one of our agents will go over them with you, including insurance and flood costs on any home you're considering.

Still deciding whether to buy at all? Try our Rent vs. Buy Calculator.

The calculator gives an estimate, not a loan approval. A lender will confirm your numbers.