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How big a mortgage can you afford?

This calculator will help you determine the approximate maximum size fixed mortgage that you can afford, based on two general guidelines:

  1. House payments of principal, interest, taxes, and homeowner's insurance (PITI) should not exceed 28% of your gross monthly pay.

  2. This monthly housing payment (PITI) plus your current monthly debt payments should not exceed 36% of your gross monthly pay.

Use your mouse or tab key to move from box to box and enter numbers.

Your current situation:

Your gross (pre-tax) monthly income (e.g., $2,500)
Your current monthly debts (e.g., $500)
Savings currently available to purchase a home (e.g., $4,000)

The type of loan you would pursue:

Length of loan (choose 15 or 30 years)
Interest rate (e.g., 7%)
Number of closing points (e.g., 2)
Other closing costs (e.g., $250)
Annual property taxes (e.g., $1,000)
Annual homeowner's insurance (e.g., $400)

These calculators are provided to give you some general guidelines and cannot predict factors unique to your finances. For more information or assistance with your personal finances, please contact your banker.

Copyright 2002 by American Bankers Association
Created by Propel Technologies, Inc.