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CNET Mortgage Calculator: How Much House You Can Afford



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CNET’s mortgage calculator can help you figure out how much home you can afford by collecting some basic financial information, layering some regional home sales data, and calculating an estimated monthly mortgage payment. (Note that the information collected is only used to calculate your monthly payment ̵

1; and not for marketing or ad targeting purposes.) Please note that this calculator can only provide an estimate and your actual monthly payment (and other related costs) depends on your specific financial situation, the property, your state of residence and the specific conditions of your lender.

How our mortgage calculator works

Our mortgage calculator uses your zip code to estimate the property tax rate and your credit score to estimate a mortgage interest rate. It uses your monthly income and your current monthly debt payments to calculate the monthly payments you can afford to stay below the target DTI ratio. Finally, the calculator subtracts your other estimated monthly expenses, such as property taxes and homeowners insurance, to determine your monthly housing budget — and the total home price you can afford.

The formula used is: Monthly Payment = (Income x DTI) – Debt – Tax – Insurance.

How a mortgage calculator can help you

A home is the biggest purchase most people make. And since costs are typically spread over 15 to 30 years, it can be difficult at first to figure out how much house you can afford. Our mortgage affordability calculator uses your financial data to make an estimate. One of the advantages of our calculator is that it already takes into account monthly expenses such as property taxes and insurance, which may not be part of your monthly mortgage payment, but will contribute to your monthly living expenses. Again, keep in mind that this calculator can only provide an estimate.

Additional costs of home ownership

In addition to your principal, interest, taxes, and insurance (aka PITI), there are several other homeownership costs that you need to factor into your budget.

  • Closing costs: When you close your new home, you will likely have closing costs ranging from 2% to 5% of your total mortgage amount.
  • HOA costs: Depending on the location of your new home, you may be subject to homeowner or condo association fees every month, quarter, or year.
  • Maintenance and repairs: If you own your own home, maintenance and repair costs are unavoidable. You should also include that in your budget. Most experts recommend saving between 1% and 2% of your home’s value for annual maintenance.
  • Energy bills: Chances are that you already pay the energy bills of your current home. But keep in mind that moving to a new home, especially if you move from an apartment to a house, can lead to significantly higher costs for electricity, heat, natural gas and water.

Next steps in the home buying process

Once you know how much house you can afford, you can start with the Mortgage pre-approval process and start looking for home. Your lender will use more detailed information than our calculator, so your actual affordability may look slightly different. And don’t forget to shop around to make sure you’re getting the best rates available.

Glossary for home buyers

When you are new to buying a home, some terms may be unfamiliar. We’ve collected some of the common home buying terms to help you understand the process.

April: Your annual percentage is the combination of your interest rate and any lenders.

Creditworthiness: Your credit score is essentially an assessment of your creditworthiness. It tells lenders how likely you are to repay your loan. In general, the higher your credit score, the lower your interest rate.

DTI ratio: Your debt-to-income ratio is your monthly debt payments divided by your monthly income. It shows lenders what percentage of your income goes toward debt each month. The highest DTI you can have for a mortgage is 43%, although most lenders prefer a DTI of 36% or less.

Deposit: Your down payment is the amount you pay upfront for your home, expressed as a percentage of the purchase price. Most lenders require at least a 3% to 5% down payment, although a down payment of at least 20% will result in no private mortgage insurance.

Insurance for homeowners: Homeowners insurance is a type of insurance to reimburse you for your losses in the event your home is damaged or destroyed. Most mortgage lenders require borrowers to have homeowners insurance.

Income: To qualify for a mortgage, lenders typically use your gross income, which is your income before taxes or other deductions.

Mortgage term: The term of your mortgage is the number of years of your mortgage. Most mortgages have a 30-year term, but you can also get a 15 or 20 year term.

PITI: PITI stands for principal, interest, taxes and insurance, the four components of your monthly living expenses.

Property Tax: Property taxes are paid to your local government. The amount you pay depends on the value of your home and the property tax rate in your region.


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