Mortgage required income calculator
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Updated: February 28, 2024
So, you've found the perfect home, a place where you could see yourself living happily for years! But will your dream house send you to the poorhouse? Use this calculator to find out if you could afford a mortgage on the home, given your income and your other expenses.
How to use income required for mortgage calculator
You may have an idea of what you think you can afford to put towards a mortgage every month, but you shouldn't bet the house on a guesstimate. It's important to know what you need to save for a downpayment, can actually afford and what numbers you need to include in your fixed monthly housing expenses. That's where our Income Required for Mortgage Calculator comes in.
Use this calculator to reveal the hard numbers of what you can expect to pay every month on your home, and how much income you need to afford the home, save for the future and still live comfortably.
Whether it's your first home or your next home, follow these steps and know how much you really have to spend before walking in your potential new front door:
- 1 Compile all important documents that detail your personal financial circumstances, including the total anticipated mortgage amount, mortgage length, anticipated interest rate, and estimated insurance and property tax.
- 2 Input each data field into the designated spaces on the calculator.
- 3 Select the ‘calculate’ to see what income you need to qualify for a mortgage.
- 4 Select 'view report' to see a more detailed breakdown of expected expenses, costs and calculations.
- 5 Select 'print' to have a hard copy for future reference.
Remember, the number provided by the calculator is an estimate only and is solely based on the information you provide regarding your current personal finances. Use this calculator as a guide only. It should not be used in place of a pre-qualification with your financial institution.
What percentage of your income is ideal for a mortgage payment?
It’s recommended that no more than 28-30% of your gross monthly income goes towards your mortgage.
This stems from the “28/36 Rule,” which originated from mortgage lenders who said this breakdown would enable adequate availability of funds for unexpected expenses, other bills and personal savings, thus protecting homeowners from becoming house poor, or worse, defaulting on their loan.
Of course, personal financial contexts vary, and like many rules, applying your unique situation, standards, goals and expectations will determine what breakdown best suits you.
Income required for mortgage calculator FAQs
Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
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