Affordability Calculator Exactly how much house can you afford to buy? This handy calculator can give you an idea based upon the information that you enter. Using the front ratio, or housing payment ratio, and the back ratio, or debt payment ratio, this calculator can give you an estimate of the purchase price that your level of monthly income coupled with your level of monthly debt will allow you to buy.
This calculator looks at all of the expensive costs of owning a home, including taxes, insurances, and mortgage payments. Additionally, it looks at the potential homeowner's ability to pay. Moreover, this financial tool works with a debt-to-income ratio. It compares your total debt to your total income to see exactly how much more you can afford to take on in financial debt.
You can enter an interest rate and term for one loan or for a few different combinations. The most important thing for you to do when using this calculator is to be as accurate as possible. A lot of information is requested and all of it comes into play to figure out what you can afford.
Once the computations are finished, the financial analysis will display the size of the down payment that will be needed as well as the value of the home that fits your budget. Additionally, it will give you a breakdown of the monthly expenditures associated with the purchase of a home.
Calculator Legend
- Down Payment: Enter the amount that you will spend for the down payment. Enter it as a percent or as a whole dollar amount, but be sure to label it.
- Interest Rate: Enter the amount of interest that is being charged with the loan as a percentage.
- Length: Enter the number of years that you will hold the loan.
- Estimated Front Ratio: Enter an estimate for the front ratio or your housing payment ratio. The front ratio is your housing expense, or your total monthly mortgage payment compared to your total monthly income.
- Estimated Back Ratio: Enter your estimated back ratio. The back ratio is your total monthly obligations, including your mortgage, compared to your total monthly income.
- Income 1: Enter the monthly amount of the first income.
- Income 2: Enter the monthly amount of the second income.
- Income 3: Enter the monthly amount of the third income, if any.
- Income 4: Enter the monthly amount of the fourth income, if any.
- Income 5: Enter the monthly amount of the fifth income, if any.
- Auto Loans: Enter the monthly payment amount of all auto loans.
- Student Loans: Enter the monthly payment amount of all student loans.
- Installment: Enter the monthly amount of all installment loans.
- Revolving Accounts: Enter the monthly minimum payment amount of all revolving accounts.
- Other Debt: Enter the monthly payment amount of all other debt.
- Annual Taxes: Enter the total amount of annual local and state taxes that have been assessed on the property.
- Annual Insurance: Enter the annual figure for the homeowner's insurance that will be held on the home to protect its value against damage due to disasters and liability claims.
- Annual PMI: Enter the annual fee that you are charged for PMI, or private mortgage insurance- required by lenders when consumers finance more than 80% of the home.
DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.
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