Understanding Your Affordability
Our mortgage affordability calculator is more than just a numbers game; it's a tool to empower your financial decisions. By inputting your annual income, monthly debts, and planned down payment, you get a snapshot of your potential purchasing power based on standard lending guidelines. Let's break down what these numbers mean for you.
How the Calculator Works
Lenders primarily look at two key metrics to determine how much they're willing to lend you: your debt-to-income (DTI) ratio and the loan-to-value (LTV) ratio. Our calculator uses these principles to provide a reliable estimate.
- Annual Income: This is your gross (pre-tax) income. It forms the foundation of what lenders think you can afford on a monthly basis.
- Monthly Debts: This includes recurring payments like car loans, student loans, and credit card minimums. A lower debt load means more of your income can go towards a mortgage.
- Down Payment: This is the cash you put towards the home purchase upfront. A larger down payment reduces the loan amount, which can lower your monthly payment and help you secure a better interest rate.
- Interest Rate: This is the cost of borrowing money. The rate you get can significantly impact your monthly payment and the total interest you pay over the life of the loan.
Ready for a Personalized Rate?
This calculator gives you a great estimate. The next step is to connect with an advisor who can provide personalized guidance based on live market data.
Get Expert Guidance