Payment Calculator
Calculate maximum affordable loan amount and home price based on your desired monthly payment
What You Can Afford
Monthly Budget Breakdown
* Property tax and insurance estimates are approximate and vary by location. PMI applies when down payment is less than 20%.
Year-by-Year Payment Breakdown
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|---|---|---|
| Year 1 | $3,537 | $20,463 | $312,885 |
| Year 2 | $3,774 | $20,226 | $309,111 |
| Year 3 | $4,026 | $19,974 | $305,085 |
| Year 4 | $4,296 | $19,704 | $300,789 |
| Year 5 | $4,584 | $19,416 | $296,205 |
| Year 6 | $4,891 | $19,109 | $291,315 |
| Year 7 | $5,218 | $18,782 | $286,097 |
| Year 8 | $5,568 | $18,432 | $280,529 |
| Year 9 | $5,941 | $18,059 | $274,588 |
| Year 10 | $6,338 | $17,662 | $268,250 |
Showing first 10 years of 30-year loan term
About This Tool
A payment calculator helps you determine how much you can afford to borrow based on your desired monthly payment. Instead of calculating payments from a loan amount, this reverse calculation shows you the maximum loan and home price you can afford with a specific monthly budget. This is essential for home buyers and anyone planning major purchases.
How Reverse Loan Calculation Works
Traditional mortgage calculators start with a home price and calculate the monthly payment. This payment calculator does the opposite - it starts with what you can afford monthly and works backward to determine your purchasing power. The calculation uses the same loan payment formula but solves for principal (loan amount) instead of payment. This approach is more practical for budgeting because you likely know your monthly budget better than you know home prices in your market.
Understanding Your Budget Constraints
Financial experts recommend that your housing payment should not exceed 28-30% of your gross monthly income. For example, if you earn $6,000 per month, your housing payment should be around $1,680-$1,800. Remember that your monthly housing costs include more than just principal and interest - you'll also need to budget for property taxes, homeowners insurance, HOA fees, and maintenance. A common rule is to add 1-2% of the home's value annually for maintenance and repairs.
The Impact of Down Payment
Your down payment percentage significantly affects your purchasing power. With a 20% down payment, you avoid private mortgage insurance (PMI) and can afford a more expensive home with the same monthly payment. For instance, if you can afford a $2,000 monthly payment at 6.5% for 30 years, you can borrow about $316,000. With 20% down, this means you can afford a $395,000 home. With only 10% down, you could afford a $351,000 home with the same payment - a difference of $44,000 in purchasing power.
Optimizing Your Buying Power
To maximize what you can afford: improve your credit score to qualify for lower interest rates (even 0.5% makes a significant difference), save for a larger down payment, consider a 15-year mortgage if you can afford higher payments (you'll pay much less interest overall), and get pre-approved to understand your actual borrowing capacity. Also shop around - different lenders offer different rates, and comparing at least 3-5 lenders can save you thousands over the life of your loan.