Maximum Mortgage Calculator
Calculate how much house you can afford based on your complete financial picture
Front-end ratio (housing expenses): Typically ≤ 28%
Back-end ratio (total debt): Typically ≤ 36%
Some lenders allow up to 43-50% DTI for qualified buyers
DTI = (Total Monthly Debt ÷ Gross Monthly Income) × 100
Principal & Interest: Base mortgage payment
Property Taxes: Typically 1-2% of home value annually
Home Insurance: Varies by location and coverage
PMI: Required if down payment < 20%
1. Introduction
A Maximum Mortgage Calculator helps determine the largest mortgage loan you can qualify for based on your income, debts, down payment, and current interest rates. This tool is essential for:
First-time homebuyers
Real estate investors
Financial planning
Budgeting for a new home
2. Key Factors in Mortgage Calculation
Primary Calculation Components
| Factor | Description | Typical Requirement |
|---|---|---|
| Gross Income | Your total pre-tax income | Must support monthly payments |
| Debt-to-Income (DTI) Ratio | Monthly debts ÷ Monthly income | Usually < 43% for approval |
| Down Payment | Initial payment percentage | 3-20% typically |
| Credit Score | Determines interest rates | 620+ for conventional loans |
| Interest Rate | Current market rates | Affects total borrowing power |
| Loan Term | 15-30 years most common | Longer terms = lower payments |
3. Standard Calculation Methods
A. 28/36 Rule (Standard Mortgage Rule)
28%: Maximum housing expenses (PITI) of gross monthly income
36%: Maximum total debt payments (including mortgage) of gross income
Example Calculation:
Monthly income: $6,000
Max housing payment (28%): $1,680
Max total debt (36%): $2,160
Existing monthly debts: $400
Available for mortgage: $1,760 ($2,160 - $400)
B. Debt-to-Income Ratio Method
Standard max DTI is 43% for most loans)
4. Advanced Calculation Factors
Additional Considerations
| Factor | Impact |
|---|---|
| Property Taxes | Varies by location |
| Home Insurance | Typically 0.5-1% of home value/year |
| PMI (if <20% down) | 0.5-1.5% of loan annually |
| HOA Fees | For condos/townhomes |
| Loan Type | Conventional/FHA/VA differ in requirements |
5. How to Use a Maximum Mortgage Calculator
Enter your gross annual income
Input all monthly debt payments (cars, student loans, credit cards)
Select your credit score range
Choose your target down payment %
Enter current interest rates (or use default)
Add property taxes/insurance estimates (if known)
