Have A Question About Our Mortgage Calculators
What is a mortgage calculator?
Its a tool that gives you an estimate of how much you could borrow from us or what your monthly repayments and other costs might be, for a mortgage in the UK.
We have different calculators that can help you in different ways each calculator does something slightly different.
Who is a mortgage calculator for?
Its for you if youre a first time buyer, youre looking to remortgage, move or buy an additional home, or youre a buy-to-let landlord.
What information do I need to use a calculator and how do you decide what I can afford?
When you apply for a mortgage or use our calculator, well ask you for information like
- How many people are applying
- How much you regularly spend on things like your credit or store cards, loans, overdrafts, maintenance and pension
- Why youre applying for example, buying your first home, moving home, or buying a second home
We wont ask about groceries, utility bills or travel.
How much can I afford to borrow?
Our calculators give you a idea of what you might be able to borrow from us to buy a home, and what your monthly and total mortgage payments could be, for different types of mortgages.
Which mortgage calculator is right for me?
The most popular place to start is our borrowing calculator or our affordability calculator.
How Does My Debt
Your debt-to-income ratio measures your monthly debt compared to your monthly income. A mortgage lender will use your gross income when calculating your debt-to-income ratio for mortgage approval. Generally, lenders like to follow the percentages above so that your monthly mortgage payment does not exceed 28% of your gross monthly income, and your total debt doesnt exceed 36% of your gross monthly income. However, if your debt makes it so your ratio is higher, you might still get approved for a mortgage, especially if you have a great .
Keep in mind, though, that theres a difference between qualifying for a mortgage and being able to afford it comfortably. If you already have a lot of monthly debt payments before taking on a mortgage, you may find that its difficult to keep up.
How To Calculate How Much House You Can Afford
To produce estimates, both Annual Property Taxes and Insurance are expressed here as percentages. Generally speaking, and depending upon your location, they will typoically range from about 0.5% to about 2.5% for Taxes, and 0.5% to 1% or so for Insurance.
Front End and Back End debt ratios are to determine how much of your monthly gross income can be used for your mortgage debt and how much can be used to satisfy all your regular obligations . The 28% and 36% ratios are standard in the mortgage world, but lenders may have other combinations available, such as 33%/38%.
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Rates On A 2000 Per Month Mortgage
Mortgage rates arent calculated based purely on income and affordability, so its impossible to give an exact idea of what rates you would expect on a mortgage costing £2,000 per month, without considering all the criteria discussed above.
To give an idea of how rates affect your mortgage payments, weve put together the table below
| Interest Rate |
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Can I Get A Buy
You could likely buy a property worth £800,000 and expect to pay around £2,000 for an interest-only, buy-to-let mortgage. Your rental income from the property would need to be around £2,500-£2,900.
Buy-to-let mortgages are different from typical residential mortgages in two important ways:
Ask a quick question
We know everyone’s circumstances are different, that’s why we work with mortgage brokers who are experts in all different mortgage subjects.Ask us a question and we’ll get the best expert to help.
Onlinemortgageadvisor.co.uk is an information website all of our content is written by qualified advisors from the front line, for the sole purpose of offering great, relevant, and up-to-date information on all things mortgages.
Online Mortgage Advisor is a trading name of FIND A MORTGAGE ONLINE LTD, registered in England under number 08662127. We are an officially recognised Introducer Appointed Representative and can be found on the FCA financial services register, number 697688.
The Financial Conduct Authority does not regulate some forms of buy to let mortgage.
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Estimating How Much House You Can Afford
How much house you can afford depends on several factors, including your monthly income, existing debt service and how much you have saved for a down payment. When determining whether to approve you for a certain mortgage amount, lenders pay close attention to your debt-to-income ratio .
Your DTI compares your total monthly debt payments to your monthly pre-tax income. In general, you shouldnt pay more than 28% of your income to a house payment, though you may be approved with a higher percentage.
Keep in mind, however, that just because you can afford a house on paper doesnt mean your budget can actually handle the payments. Beyond the factors your bank considers when pre-approving you for a mortgage amount, consider how much money youll have on-hand after you make the down payment. Its best to have at least three months of payments in savings in case you experience financial hardship.
Along with calculating how much you expect to pay in maintenance and other house-related expenses each month, you should also consider your other financial goals. For example, if youre planning to retire early, determine how much money you need to save or invest each month and then calculate how much youll have leftover to dedicate to a mortgage payment.
Ultimately, the house you can afford depends on what youre comfortable withjust because a bank pre-approves you for a mortgage doesnt mean you should maximize your borrowing power.
How Much House Can I Afford With A Usda Loan
USDA loans for qualifying rural areas are much more flexible than regular loans. They dont require a down payment and can include the mortgage insurance fee in the loan. This means you can actually finance 102% of the value of the house and avoid paying this fee upfront.
Keep in mind, however, that there are parameters for income eligibility and for the price and size of the house itself. Even if you can afford a certain amount, the eligibility might be for a less expensive home.
In order to see these requirements in detail, you can go to the USDA website and look at the qualifying areas and income by county.
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Despite Bigger Budgets Buyers Have Fewer Options In Many Metros
Back in June, homebuyers thought they could take advantage of low rates and get a good deal because of the pandemic, said Providence, RI Redfin agent Lisa Bernardeau. Now theyre seeing thats not the case because inventory is so tight and theres so much competition, but most buyers are still powering through. Regardless of high prices, a lot of buyers have been watching the market and they dont want to miss out on historically low rates or risk prices going even higher. Low interest rates are the number one driver right now.
There were fewer homes for sale on a $2,500 monthly budget than last year in the majority of metros included in this report, including Providence, where 74.4% of homes are affordable on that budget now versus 75.9% in July 2019.
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How Down Payment Size Impacts Home Equity
| Percentage | |
|---|---|
| $250,000 | $0 |
The rule of thumb still stands: 20% of the home value is the ideal amount of money for a down payment. This amount buys you equity in the home, which helps secure the loan. When you donât have a least 20% to put down, you have to find alternate means to secure the mortgage.
This can mean private mortgage insurance , which is an added monthly charge to secure your loan. If you donât have enough money for a down payment, many lenders will require that you have mortgage insurance. Youâll have to pay your monthly mortgage as well as a monthly insurance payment, so itâs not the best option if your budget is tight.
Youâll stop paying PMI when your mortgage reaches about 78% of the homeâs value. While certain homebuyers can qualify for little or no down payment, through VA loans or other 0% down payment programs, most homeowners who donât have a large enough down payment will have to pay the extra expense for PMI.
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How Much Home Can I Afford
Purchasing a home is a decision that will impact your financial situation for the next 15 to 30 years. Its important to calculate your monthly income and expenses carefully to avoid winding up with a mortgage loan you cant pay in the long run.
And, if youre ready to buy, visit our best mortgage lenders page to find the right lender for you.
How much house you can afford will mainly depend on the following:
- Your loan amount and mortgage term
- Your gross monthly and annual income
- Your total monthly debt or monthly expenses, including credit card debt, student loan payments, car payment, child support, and other expenses
- State property taxes, which are paid annually or biannually and vary by state
- Current mortgage rates and closing costs, which vary by location
- Homeowners association and condo fees
Generally, most new homebuyers will consider taking out a conventional mortgage loan. These loans typically require a down payment of no less than 3% of the property value, a minimum credit score of 620, a debt-to-income ratio of 36% and that the monthly payment doesnt exceed 28% of the buyers pre-tax income.
Lenders will also look at a buyers ability to deal with all the fees and upfront costs associated with buying a home, such as closing costs and insurance fees.
Shopping With A $2000 Monthly Housing Budget
The purchase price you can afford with a $2,000 monthly housing ranges from $250,000 to $300,000. But the exact number varies based on your location.
We set some basic assumptions to look for options within a $2,000 monthly housing budget. The numbers youll find below are based on a 30-year fixed home loan with a 5.3% interest rate. Additionally, we set the down payment at 12%, which was the median down payment in 2021 based on data from the National Association of Realtors.
With Redfin’s data, the different taxes, insurance premiums, and homeowners’ association fees are built into the options we selected below. A look around the country shows very different choices for potential homeowners with $2,000 to spend each month.
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What $2000 A Month Gets You With Mortgage Rates At 20
Mortgage interest rates for 30-year fixed loans have been on the rise for months, this week topping 7%, a 20-year high, according to data from Freddie Mac
As a potential buyer, higher interest rates impact your housing options. With more expensive financing costs eating up more of your monthly income, the size of the mortgage you qualify for might be shrinking. But buyers can still find a place to call home.
With $2,000 per month to spend on your mortgage payment, you are likely to qualify for a home with a purchase price between $250,000 to $300,000, said Matt Ward, a real estate agent in Nashville.
Ward also points out that other financial factors will impact your home purchase budget. For example, if you can make a larger down payment, then you can likely manage to buy a more expensive home.
Ready To Start Shopping
Your house shopping situation may be a bit different than everyone elses. With a $2,000 mortgage payment budget, other variables like your down payment and location will significantly impact how much house you can afford.
As you navigate this rising rate environment, discussing the details of your situation with a mortgage broker or loan officer can help you gain a realistic understanding of what you can afford.
»Expert Tip: Thinking about buying a home but unsure of how much of a down payment you need to make? Connect with a lender that specalizes in $0 down or low down payment loans so you can shop around for a home comfortably. Get started here!
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How Much Do I Need To Make To Buy A 500k House
The Income Needed To Qualify for A $500k Mortgage A good rule of thumb is that the maximum cost of your house should be no more than 2.5 to 3 times your total annual income. This means that if you wanted to purchase a $500K home or qualify for a $500K mortgage, your minimum salary should fall between $165K and $200K.
And 6 Golden Rules To Find Out Which House You Can Afford
- Savings: remember that you will need 20% of the price of the house and approximately 10% for expenses.
- Revenue: calculate your monthly mortgage payment, bearing in mind that it should not exceed 30% of your net income.
- The value of the house: stay within your budget when assessing areas, neighbourhoods that you like and the size of house you need.
- Age: if you are considering a longer-term mortgage, bear in mind that right now you must be less than 40 years old.
- Other common expenses: don’t forget about other loans, what you spend on food shopping, your car, tennis lessons…
- Your life: stop and think about how you imagine yourself in a few years, about your other plans, what your job situation will be or whether you will have dependents.
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Most Affordable Markets For Homebuyers
According to 2020 data fromZillow Research, record low mortgage rates have helped to boost affordability for potential homeowners. The table below shows the top 10 most affordable markets to live in for December 2020 and is based on a typical home value of no more than $300,000 . The market and share of income spent on a mortgage may fluctuate based on the current mortgage rate, the typical local homeowner’s income and the typical local home value.
Next: See How Much You Can Borrow
You’ve estimated your affordability, now get pre-qualified by a lender to find out just how much you can borrow.
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What will your new home cost? Estimate your monthly mortgage payment with our easy-to-use mortgage calculator.
- Award Ribbon
Use our VA home loan calculator to estimate payments for a VA loan for qualifying veterans, active military, and military families.
- Dollar Sign
Your debt-to-income ratio helps determine if you would qualify for a mortgage. Use our DTI calculator to see if you’re in the right range.
- Pig Refinance calculator
Interested in refinancing your existing mortgage? Use our refinance calculator to see if refinancing makes sense for you.
Participating lenders may pay Zillow Group Marketplace, Inc. a fee to receive consumer contact information, like yours. ZGMI does not recommend or endorse any lender. We display lenders based on their location, customer reviews, and other data supplied by users. For more information on our advertising practices, see ourTerms of Use & Privacy. ZGMI is a licensed mortgage broker,NMLS #1303160. A list of state licenses and disclosures is availablehere.
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How Much Mortgage Can I Qualify For
Lenders have apre-qualification processthat takes your finances into account to determine how much they are willing to lend you. Once the lender has completed a preliminary review, they generally provide a pre-qualification letter that states how much mortgage you qualify for. Get pre-qualified by a lender toconfirm your affordability.
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So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.
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How Much House Can You Afford
| Monthly Pre-Tax Income | |
|---|---|
| $3,000 | $523,000 |
The table above used $600 as a benchmark for monthly debt payments, based on average $400 car payment and $200 in student loan or credit payments. The mortgage section assumes a 20% down payment on the home value. The payment reflects a 30-year fixed-rate mortgage for a home located in Kansas City, Missouri. Plug your specific numbers into the calculator above to find your results. Since interest rates vary over time, you may see different results.
In practice that means that for every pre-tax dollar you earn each month, you should dedicate no more than 36 cents to paying off your mortgage, student loans, credit card debt and so on. This percentage also known as your debt-to-income ratio, or DTI. You can find yours by dividing your total monthly debt by your monthly pre-tax income.
