You can use this maximum mortgage calculator to figure out how much money you can borrow; when thinking about buying a new home. The calculator provides the user with two maximum mortgage values, based on the most common measures that lenders use: The rules of 28 and 36.
Calculator Definitions
The variables used in our online calculator are defined in detail below, including how to interpret the results.
Gross Annual Income ($ / Year)
Your gross annual income is the money you make before any taxes are taken out. This value is all employer compensation for the year, including bonus payments and compensated overtime, in addition to your base salary. In general, if you include a bonus or overtime amounts, then you may need to provide proof these payments are not unusual and can be "counted on" each year.
Property or Real Estate Taxes ($ / Year)
This is where you would provide an estimate of the annual property taxes, or real estate taxes, that you might be paying each year.
Homeowners Insurance ($ / Year)
Homeowners insurance is not only a smart way for the home's owner to protect their investment, but if you have a mortgage, then the lender will likely require you to carry adequate insurance to protect their investment.
Personal Loans ($ / Month)
If you have a personal loan from a lending institution, then enter your required monthly payment here.
Association Fees / Dues ($ / Month)
Some housing developments charge association fees or dues for expenses such as snow removal, or lawn care costs for common areas. If you're planning to live in a community that charges fees, then enter that monthly amount here.
Car Loans or Leases ($ / Month)
If you have a car lease or loan, then enter your monthly payments here.
Student Loans ($ / Month)
If you're still paying off a student or college loan, then enter your monthly payment amount here.
Other Loans ($ / Month)
If you have any other monthly financial obligations, then this calculator needs those amounts entered here. This data allows the calculator to figure out how large a mortgage you qualify for; based on your income and expenses.
Annual Interest Rate (%)
This is the annual interest rate on the mortgage. This is not the APR, which takes into account other costs associated with the mortgage.
Term of the Loan (Years)
This is the original term or length of the mortgage, stated in years.
Monthly Payments Relating to the Home ($ / Month)
Your monthly payments relating to the home converts your real estate taxes and homeowner's insurance into monthly amounts.
Total Other Monthly Debt Obligations ($ / Month)
This is the total of all your other monthly debt obligations.
Monthly Obligations Excluding Mortgage ($ / Month)
This is the total of all your monthly debt obligations, excluding your monthly mortgage. These last three items are the important inputs when calculating your monthly mortgage maximum.
Monthly Payment - Rule of 28 ($ / Month)
This is how much you can afford to pay each month to service all of your debt obligations relating to the home itself. This is the total amount you can afford to pay each month for your mortgage, insurance, and property taxes.
Monthly Payment - Rule of 36 ($ / Month)
This is how much you can afford to pay each month to service all of your monthly debt obligations. The value can be higher or lower than the rule of 28; however this rule considers all of your outstanding debt.
Maximum Mortgage
This calculator provides the user with an estimate of two monthly mortgage maximums, one for each of the two most common rules. This is the maximum mortgage you can afford, based on your other financial obligations.
Maximum Mortgage Calculator
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.
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