How much mortgage can I afford?

Intuitively, we all know taking out a mortgage will be, for almost everyone, the largest investment a person or family will make.

Further, a home loan is frequently thought of as a good investment when it is used to finance the purchase of a house or building that has a reasonable chance to appreciate in value.

"But how do I know if I can afford a mortgage," is a common refrain.

Helping you answer this question is precisely the goal of this mortgage calculator. You'll quickly notice this calculator is capable of a great deal more than just calculating a monthly mortgage payment. Spend a few minutes with it, and it will help you understand the actual cost of any potential (or existing) home loan. More below...»

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This home loan calculator does have a lot of options. Don't let the number of details put you off. Fortunately, if you only want to calculate a payment amount, you'll frequently have to enter only three values while leaving the other settings and inputs unchanged. **The payment calculation is as easy as this:**

- Click clear and enter values for:
- Loan Amount
- Number of Payments
- Annual Interest Rate

- Leave "Payment Amount (P & I only)" set to 0.
- Click either
**"Calc"**or**"Payment Schedule."**

That's it. Now you'll know the principal and interest payment required to pay off the debt.

But for sure, this debt payment does not begin to cover the full cost of having a home loan. There are few other expenses, of course! And this calculator is designed to consider them all.

VERY IMPORTANT - You __must__ enter a 0 if you want a value calculated. Some users have been frustrated by this. They want to know why the calculator does not just recalculate if they have changed one of the inputs.

This behavior is by design. We want the calculator to create an amortization schedule using whatever parameters you want to use. This is a feature!

By not automatically recalculating a payment, this calculator lets those users who do not have a "standard" loan create a payment schedule.

You can use this calculator to answer such questions as:

- How much mortgage can I afford?
- What is the mortgage payment?
- How much money do I need to buy a house?
- What is the down payment on a house?

Related - Need to know the exact balance of a mortgage? Then use this mortgage payoff calculator.

The printable mortgage schedule has recently been upgraded to add support for the following:

**PMI**—**private mortgage insurance**. Could be required if your loan to value**(LTV)**is more than 80%. That is, your down payment frequently needs to be 20% or more to avoid PMI.**Property Taxes**— are included in the**escrow**column on the schedule. Please be sure to enter an annual amount in the calculator.**Casuality Insurance**— is also included in the**escrow**column on the mortgage schedule. Again, enter an annual amount.**Points**— calculated on the loan amount, they are reported in the first row of the schedule.

All the above are optional. That is, you may set them to 0.

Unlike our general loan or simple loan calculators, this calculator will allow you to have more than one unknown value in certain cases.

To indicate an unknown value, enter '0' (zero). There must be one unknown in each group — that is two unknowns are required.

You can enter the price of the real estate, the down payment percent you need, the total number of periods for which you want to borrow the money and the interest rate. When you click on "Calc", the loan amount and the monthly payment will be calculated.

If you enter the loan amount and "0" for the down payment percentage, then the down payment percentage (and down payment amount) will be calculated.

If you enter "0" for the price, a down payment percentage, "0" for the mortgage amount, the total periods, the interest rate and the payment you can afford, the calculator will calculate the loan amount and the price you can afford to pay. You can use this calculation to tell you what you can afford to pay and borrow and still stay within a budget.

Annual Property Taxes, Annual Insurance and Private Mortgage Ins. (PMI) are all optional. If you enter values, the periodic portion of each will be calculated and shown on the schedule. Property taxes and insurance are both included under escrow.

If a borrower does not have cash to cover at least 20% of the purchase price, some lenders will require the borrower to purchase private mortgage insurance to cover against a possible default. Premiums are typically 0.5% to 2.0% of the original loan amount. The borrower can drop the insurance coverage once the mortgage balance is less than 80% of the original purchase price. The calculator handles this automatically. (There may be other conditions as well under which the lender will no longer require the PMI. One such case might be apprciation of the real estate.)

Points are charges that are normally due at closing. It is an optional input. Borrowers (normally only in USA) may select to pay a lender "points" up front in exchange for a lower interest rate. Points are expressed in percent and are calculated on the amount borrowed. 3 points on a $200,000 mortgage equals $6,000. If the user enters points, this calculator includes their value in the summary and as part of the total payment at loan origination on the payment schedule.

Some of you may be wondering about a particular calculated result or how to use a feature. I fully intend to enchance this page with examples and prehaps screen shots. In the mean time, please ask your questions below.

Your columns are mixed up.

The interest and the principal columns are wrong which is causing numbers to be incorrect.

You’re referencing the print preview? The numbers aren’t wrong there. Using the default example, click on calc and then print preview. I see the following number for interest and principal for the first payment.

1,516.67 interest

922.43 principal

The loan amount is $280,000 @ 6.5% interest rate.

(6.5 / 100 / 12) * 280,000 = 1516.667

Also, check the last running total of the principal column, the total equals the loan amount i.e $280,000.

Or were you talking about something else?

How can I enter the payment dates in the payment schedule?

If you want to enter payments as they are made (to determine exact loan balance or to handle extra or missed payments) then you can use this

loan payoff calculator. (This is a more flexible calculator but it will take time to learn. Please scroll to the bottom of the page for 25 tutorials.)If you just want to specify the loan’s origination date and first payment date and have the other payments on a regular schedule then you can use this

amortization table, which I see you have already found.Why don’t the calculators auto-complete with the correct calculations once the required fills are filled in. It would lead to a much smoother user experience. Additionally, the errors that pop up when the calculator cannot calculate are vague, it would be helpful if they could pinpoint the exact source of error. Thank you!

Hi Rachel, so there are 2 questions / issues here. I’ll take the 2nd one first.

As to the messages being vague, that should be very easy for me to fix. The problem is, they are not vague to me! Can you copy / paste here and tell me what isn’t clear and I’ll reword an update. I guess you keep seeing the message because they aren’t clear. The basic point to remember is, a user never types anything except for a number or the decimal character. And a user should use backspace to delete.

As to the calculator auto calculating rather than clicking on the calculate button, that might be a future enhancement, but it’s tricky because many calculators can solve for multiple unknowns and there also does not need to be an unknown. Lets’s say a user wants to create a schedule with a specific payment amount which is not the normal payment amount and they want to have a term that results in a final larger balloon payment. Now they enter all their values and has they get to the payment amount, it has been calculated by the calculator because it previously had been 0. That means they have to clear out the just calculated value. That’s not ideal either.

Probably the best thing is to let the user type Alt-C to calculate?

Thanks for your comments and hope to hear what text you find not to be clear.

In using the calculator, it seems that changing the accrual basis from 365 to 360 does not affect the payment amount which is incorrect. Not sure if this had been brought up before. Thanks

Hi, what calculator are you using? This calculator does not give the user an option for selecting a 360/365 day year.

But, that aside, the 360/365 day option, where offered, only impacts calculations for “exact”, “daily” or “continuous” compounding OR when a period has odd days – say monthly frequency and dates go from Oct 7th to Nov. 1. Then you’ll see a difference due to 360/365 selection. The reason for this, if compounding is monthly and the period between the 2 dates is an even month, then the interest rate used is the nominal annual rate divided by 12 (not 360 or 365).

You can check this for yourself using the Ultimate Financial Calculator.

(Please do not reply to this email. If you have a follow-up, question, please post it on this site.)

I used the amortization calculator, although I accidentally added the comment under the mortgage calculator.

I saw the statement impacts calculations for “exact”, “daily” or “continuous” compounding (when clicking settings to change the accrual basis) and even when I changed the option to compounding to daily from monthly, I could not see a difference in the payment.

Terms are $100,000 at 5% for 60 months, note date 11/1/2016 with first payment 12/1/2016.

We are in need of a loan calculator to calculate loan payments both on a 365 OR 360 accrual basis.

Appreciate your help. Thank you!

I think I understand what’s happening. If you change between 360 or 365, you then need to go back and set the payment amount to 0, and recalculate it. The payment amount will not change on its own when the user changes the days per year option. Perhaps I need to think about making that change.

Taking your numbers, I get these results:

$1,887.51 for 365

$1,890.70 for 360 days.

Thanks for posting the follow-up.

Good morning- I went in and deleted the payment amount as you recommended and then calculated again but even like this I can’t get the payment amount to recalculate. I get a payment amount of $1887.12 for both 365 and 360. Any other suggestions? Thank you

This is perplexing. The calculator definitely will calculate different payment amounts based on 360/365 selection.

Please confirm that compounding frequency is set to either “Daily” or “Exact/Simple”.

Not really sure what you mean by “delete” the payment. Specifically, it has to be set to “0” (zero).

If you reopen the settings dialog window, is your selection saved in every case? Meaning, when you select 360 and then reopen, do you see 360 selected? And same for the 365 selection. This setting is stored in a “cookie” on your local computer. Perhaps cookies are disabled? If they are, then it would not work either.

Specifically what are all your inputes and what is the result of the calculated payment?

ok, I think I got it. I corrected compounding from Monthly to Daily and made sure to set the payment to zero before changing the accrual basis. Thank you so much for your help.

I have been looking for a calculator that told me the number of months it would take, and how much interest I would save, if I added money to every monthly mortgage payment.

Your calculator takes into account exactly what I was looking for and gave me a figure in seconds.

Brilliant!

Thank you,

Gail Hunt

Thank you Gail. I’m happy you found it useful. Please tell your friends and colleagues about this site.

How do I change the date of the loan and the date of the payments?

With this calculator, the user can’t change the dates. The purpose of this calculator is to make it easy for a user to check total costs and affordability while making as few entries as possible.

For being able to set dates, you have two choices.

1. If you want to set the loan date and 1st payment date and then assume all payments are made on a fixed schedule, use the Amortization Schedule.

2. If you want to record payments as they are made, that is, the payment dates vary, then use the Ultimate Financial Calculator.

For #2, check out the tutorials on the page. Scroll down and read #25 (after reading #1), as that deals with random loan payments and calculating loan balances.