How much house can I afford with my salary?

Generally, you can afford a house that costs 2.5 to 3 times your annual salary. Use the 28/36 rule: spend no more than 28% of gross monthly income on housing costs and 36% on total debts. For example, with a $75,000 salary, you could afford roughly $1,750 monthly for housing costs.

What will my monthly mortgage payment be?

Your monthly mortgage payment (called PITI) includes principal, interest, taxes, and insurance. For a $300,000 home with 20% down at 6.5% interest, expect roughly $1,517 monthly for principal and interest, plus taxes and insurance which vary by location.

Should I get a 15-year or 30-year mortgage?

30-year mortgages have lower monthly payments but cost more in total interest. 15-year mortgages have higher monthly payments but save tens of thousands in interest. Choose 30-year if you need lower payments, 15-year if you want to save money long-term and build equity faster.

How much should I put down when buying a house?

While 20% down eliminates PMI (private mortgage insurance), you can buy with as little as 3% down. FHA loans require 3.5%, VA loans offer 0% for veterans, and conventional loans start at 3%. Larger down payments reduce monthly costs but tie up more cash.

Can I afford a $400,000 house?

To afford a $400,000 house, you typically need $80,000 annual income (using 5x income rule), at least $12,000-16,000 for down payment (3-4%), and $8,000-16,000 for closing costs. Your total monthly debts should be under 36% of gross income.

What if I can't afford 20% down?

You can still buy a home with less than 20% down. You'll pay PMI (private mortgage insurance) which adds $100-300+ monthly, but many successful homeowners start this way. FHA loans require just 3.5% down, and some conventional loans accept 3%.

How do I calculate how much house I can afford?

Use the 28/36 rule: housing costs shouldn't exceed 28% of gross monthly income, and total debt payments shouldn't exceed 36%. Include property taxes, insurance, and PMI in your calculations. Get pre-approved to know your exact buying power.

What happens if mortgage rates go up after I apply?

Get a rate lock from your lender (typically 30-60 days) to protect against rate increases during your home purchase. If rates drop, some lenders offer float-down options. Without a rate lock, your payment could increase significantly if rates rise.

What if I lose my job after buying a house?

Contact your lender immediately to discuss options like loan modification, forbearance, or refinancing. Maintain an emergency fund of 3-6 months of payments. Consider mortgage protection insurance or ensure adequate life/disability insurance coverage before purchasing.

Should I buy now or wait for rates to come down?

Timing the market is difficult. If you're financially ready and plan to stay 5+ years, buying now might make sense - you can refinance later if rates drop. Waiting risks home price increases that could offset rate savings. Focus on your personal financial readiness.

What is PITI and why does it matter?

PITI stands for Principal, Interest, Taxes, and Insurance - your complete monthly housing payment. Principal builds equity, interest is the loan cost, taxes fund local services, and insurance protects you and the lender. This is your true cost of homeownership.

What is PMI and when can I remove it?

Private Mortgage Insurance (PMI) protects lenders when you put less than 20% down. It costs 0.3-1.5% of loan amount annually. You can request removal at 20% equity or it automatically cancels at 22%. Some loans require PMI for the loan's lifetime.

What's the difference between APR and interest rate?

Interest rate is the yearly cost of borrowing money. APR (annual percentage rate) includes the interest rate plus other loan costs like origination fees and PMI. APR gives you the true cost of the loan and is better for comparing lenders.

Is it better to rent or buy a house?

Buy if you'll stay 5+ years, have stable income, 3-5% down payment, and closing costs covered. Rent if you plan to move soon, prefer flexibility, or want to invest the down payment money elsewhere. Use a rent vs buy calculator for your specific situation.

Should I pay off my mortgage early or invest?

If your mortgage rate is below 6-7%, investing typically offers better long-term returns. If above 7% or you prefer guaranteed savings, extra mortgage payments make sense. Consider your risk tolerance, other debt, and retirement savings first.

How long does it take to get approved for a mortgage?

Pre-approval takes 1-3 days with your documents ready. Full approval takes 30-45 days after your offer is accepted. Factors affecting timeline include document completeness, property appraisal, and lender workload. Shop for lenders early in your process.

What credit score do I need to buy a house?

Minimum credit scores: FHA loans 580, conventional loans 620, VA/USDA loans 580+. However, 740+ gets the best rates. If your score is low, focus on improving it before applying - even a 20-point increase can save thousands in interest.

How much are closing costs and who pays them?

Closing costs typically run 2-5% of home price. Buyers usually pay loan origination, appraisal, inspection, title insurance, and prepaid items. Sellers typically pay realtor commissions. You can negotiate who pays what or ask for seller concessions.

Moneko

Mortgage Calculator

Calculate your monthly mortgage payments (PITI - principal, interest, taxes, and insurance) and discover how much house you can afford with our comprehensive home loan calculator.

Last Updated: September 7, 2025 | Reviewed by: Yifan Lim, CTO & Financial Systems Expert

Data Sources: Freddie Mac Primary Mortgage Market Survey, MBA Mortgage Applications Survey, Current Market Rates

Home Price

Down Payment

Down Payment %

Loan Amount

Interest Rate

Loan Term

years

Start Date

Additional Costs

Include Property TaxInclude Home InsuranceInclude PMI (Private Mortgage Insurance)

Monthly Payment Breakdown

Principal & Interest$1,216

Total Monthly Payment$1,216

Loan Summary

Total Loan Amount$240,000

Total Interest Paid$197,776

Total Cost of Loan$437,776

Loan Payoff DateDec 2055

Total Payment Distribution

Principal

Interest

Your Mortgage Analysis

Monthly Payment (P&I)

$1,216.045

Principal and interest only - add taxes and insurance for total PITI

This requires ~$52K annual income using 28% rule

Down Payment

20.0% ($60,000)

Excellent! No PMI required

Total Interest Over Life of Loan

$197,776.108

Total interest you'll pay if you keep the mortgage for 30 years

82% of your loan amount

Key Insights

Your loan-to-value ratio is 80%
Making one extra payment per year could save ~$59,333 in interest
A 15-year mortgage would cost ~$1,581/month but save ~$118,666 in interest

Recommendations

high priority

Shop Multiple Lenders

Compare rates from at least 3 lenders - even 0.25% difference saves thousands

medium priority

Consider 15-Year Mortgage

Higher monthly payment but dramatically less interest over the life of the loan

high priority

Build Emergency Fund

Maintain 3-6 months of expenses before buying to handle homeownership costs

Next Steps

1
Get pre-approved with 2-3 different lenders to compare rates and terms
2
Factor in property taxes, insurance, HOA, and maintenance costs (~1-3% of home value annually)
3
Consider making bi-weekly payments to pay off mortgage faster
4
Set aside funds for closing costs (2-5% of purchase price)
5
Research first-time homebuyer programs for additional assistance

Home Buying Action Plan

high priority3-6 months

Improve Credit Score

Pay down debts and avoid new credit inquiries to optimize your rate

high priority6-12 months

Save for Closing Costs

Budget 2-5% of home price for closing costs beyond your down payment

medium priority1-2 weeks

Get Pre-approved

Obtain pre-approval letters from multiple lenders to compare options

medium priority2-3 months

Research Neighborhoods

Consider commute, schools, property taxes, and long-term value potential

Mortgage Payment Key Takeaways

PITI (Principal, Interest, Taxes, Insurance) is your complete monthly housing cost - not just the loan payment
Putting 20% down eliminates PMI (private mortgage insurance) and can save $100-300+ monthly
15-year mortgages have higher payments but save tens of thousands in total interest compared to 30-year loans
Keep your debt-to-income ratio (DTI) below 36% total and housing costs below 28% of gross income
Interest rates significantly impact affordability - even 0.5% difference changes payments by $50-100/month on a $300K loan

Mortgage Planning Guidelines

Down Payment Options:3% - 20%

FHA loans start at 3.5%, conventional at 3%, no PMI at 20%

PMI Requirement:Less than 20% down

Private mortgage insurance required with smaller down payments

28/36 Rule:Housing ≤28%, Total debt ≤36%

Recommended debt-to-income ratio guidelines

Credit Score Impact:620+ minimum

Higher scores qualify for better interest rates

15-Year vs 30-Year Mortgage Comparison

Mortgage Planning at a Glance

Ideal Credit Score:740+ for best rates, 620+ minimum for conventional loans

Down Payment Options:Conventional: 3-20%, FHA: 3.5%, VA: 0%, USDA: 0%

Closing Costs:2-5% of home price (lender fees, title, inspection, taxes)

Pre-approval Benefits:Know your budget, faster offers, stronger negotiating position

Rate Lock Period:30-60 days typical, protects against rate increases during purchase

Current Mortgage Rates (September 2025)

Latest mortgage rates showing significant drops from early 2025 highs

Loan Type	Rate	Change
30-year fixed	6.5%	-0.54% from Jan 2025
15-year fixed	5.6%	-0.67% from Jan 2025
30-year jumbo	6.75%	-0.45% from Jan 2025
FHA 30-year	6.25%	-0.62% from Jan 2025

Last updated: 2025-09-05 | Source: Freddie Mac, Federal Reserve

Key Economic Indicators (September 2025)

Current economic data providing context for financial planning decisions

Economic Metric	Current	Context
Federal funds rate	4.25-4.50%	Expected cut Sept 2025
Inflation (CPI)	2.7%	June 2025 year-over-year
Unemployment rate	4.3%	August 2025
GDP growth	2.8%	Q2 2025 annualized

Last updated: 2025-09-05 | Source: Federal Reserve, Bureau of Labor Statistics, Bureau of Economic Analysis

Understanding Mortgage Calculations

Make informed home buying decisions with our comprehensive mortgage calculator guide

How Does a Mortgage Calculator Work?

A mortgage calculator helps you estimate your monthly home loan payments based on the loan amount, interest rate, term, and other factors. By inputting your details, you can quickly see how changes in down payment, interest rates, or loan terms affect your payment and the total interest paid over the life of the loan.

Key Mortgage Terms

Principal:The amount you borrow from the lender to purchase your home.
Interest:The cost charged by the lender for borrowing money, typically expressed as an annual percentage rate (APR).
Down Payment:The upfront amount you pay toward the home's purchase price, reducing the amount you need to borrow.
Loan Term:The length of time you have to repay the loan, commonly 15 or 30 years.
Amortization:The process of paying off your loan through regular payments over time, with each payment covering both principal and interest.

Benefits of Using Our Calculator

Accuracy:Get precise payment estimates based on current market rates and your specific loan details.
Transparency:See exactly how much of your payment goes toward principal vs. interest each month.
Scenario Testing:Compare different loan terms, interest rates, and down payment amounts to find your optimal mortgage.
Cost Awareness:Understand the total cost of your loan over its entire term, including all interest paid.
Budget Planning:Plan your housing budget more effectively with accurate monthly payment estimates.

Smart Mortgage Tips

Consider the Total Cost

Look beyond the monthly payment to understand the total cost over the life of the loan.

Don't Forget Extra Costs

Remember to include property taxes, insurance, PMI, HOA fees, and other expenses in your budget.

Shop Around for Rates

Even a 0.5% difference in interest rate can save you thousands over the life of your loan.

Consider Loan Term Carefully

A shorter term means higher payments but less interest paid overall.

Frequently Asked Questions

Private Mortgage Insurance (PMI) is typically required if your down payment is less than 20% of the home's value. It protects the lender in case you default on the loan.

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