Calculate How Much of a Mortgage I Can Afford
Determining how much of a mortgage you can afford is a crucial step in the home buying process. Our calculator helps you make an informed decision…
- Enter your monthly income.
- Enter your monthly expenses.
- Enter the desired loan term in years.
- Enter the interest rate.
- Click ‘Calculate’.
The calculator uses the following formula to determine the maximum mortgage amount:
M = (I – E) * (L / (I * L + 1))
Where:
- M = Maximum mortgage amount
- I = Monthly income
- E = Monthly expenses
- L = Loan term in months
| Income | Affordable Mortgage |
|---|---|
| $50,000 | $150,000 |
| $75,000 | $225,000 |
| $100,000 | $300,000 |
| Expenses | Affordable Mortgage |
|---|---|
| $1,000 | $300,000 |
| $1,500 | $200,000 |
| $2,000 | $150,000 |
- Consider other debts and financial obligations.
- Factor in future expenses, like home repairs and maintenance.
- Remember, it’s better to buy a home you can comfortably afford than one that stretches your budget.
What if my expenses change?
You can recalculate using the updated expense amount.
Can I afford a higher mortgage if I have a larger down payment?
Yes, a larger down payment can increase the maximum mortgage amount you can afford.