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Mortgage Required Income Calculatorv
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Mortgage required income calculator

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Leslie Kennedy

By Leslie Kennedy

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Updated: February 28, 2024

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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.

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By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.



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Mortgage Required Income Calculator | Moneywise
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Loan amount:
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**FIG_GRAPHTITLE** Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Definitions

Desired mortgage amount

The total loan amount your are interested in receiving.

Monthly housing expenses

Your monthly housing expenses from the housing expenses worksheet. The items entered as housing expenses make up the taxes and insurance portion of your monthly PITI payment.

Monthly liabilities

Your monthly liabilities from the liabilities worksheet. Your monthly liabilities are used to calculate your maximum PITI.

Monthly housing payment (PITI)

This is your total Principal and Interest, Tax and Insurance (PITI) payment per month. This includes your principal, interest, real estate taxes, hazard insurance, association dues or fees and principal mortgage insurance (PMI). Maximum monthly payment (PITI)

Maximum principal and interest (PI)

This is your maximum monthly principal and interest payment. It is calculated by subtracting your monthly taxes and insurance from your monthly PITI payment.

Start interest rates at

The current interest rate you could receive on your mortgage. This is used as the starting point for displaying a range of interest rates and the resulting mortgage amount.

Term in years

The number of years over which you will repay this loan. The most common mortgage terms are 15 years and 30 years.

Real estate taxes

The amount you expect to pay in property taxes. This is normally paid either semi-annually or annually.

Hazard insurance

The amount you expect to pay for hazard insurance. This is normally paid either semi-annually or annually.

Association dues or fees

The amount you expect to pay a homeowner's association or other required monthly fee. This is normally paid monthly.

Monthly PMI

Monthly cost of Private Mortgage Insurance (PMI). For loans secured with less than 20% down, PMI is estimated at 0.5% of your loan balance each year.

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. 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. 2 Input each data field into the designated spaces on the calculator. 
  3. 3 Select the ‘calculate’ to see what income you need to qualify for a mortgage.
  4. 4 Select 'view report' to see a more detailed breakdown of expected expenses, costs and calculations.
  5. 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

  • What income do you need for a $300K mortgage?

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    The income necessary for a $300K mortgage depends on several factors including your mortgage term, your interest rate, and your debt-to-income ratio. For a $300K mortgage, borrowers might typically require a minimum annual income between $65,000-$70,000.

  • What income do you need for a $500K mortgage?

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    To comfortably afford a $500,000 mortgage, one would typically need an annual income of around $120,000 to $150,000. The precise income required can vary significantly depending upon several factors including the interest rate, the length of the loan, and the lending institution's specific criteria.

  • What income do you need for a $800K mortgage?

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    You need an approximate annual income of roughly $175,000 to $200,000 to comfortably afford the monthly mortgage payments for a $800K mortgage.

  • Are income-based mortgage calculators accurate?

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    Income-based mortgage calculators offer a glimpse into what you can afford to spend on a new home, based on your unique circumstances and the information you provide.They aren’t official or binding and act only as a tool you can use when planning to buy a home. Income-based mortgage calculators can not and do not consider unforeseen market changes, expenses or changes in life circumstances.

Leslie Kennedy Senior Content Editor

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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