A mortgage calculator shows you the monthly cost of a home, helping you see if it fits your budget. You can try different down payments and interest rates to find what’s affordable for you.

Lenders calculate how much you can afford by looking at your debt-to-income ratio (DTI). Most mortgage loans require a DTI of 45-50%, including your expected housing costs.

DTI is the balance between your income and debt, showing how much of your monthly income goes toward debt payments. For example, if 50% of your income goes to debt, your DTI is 50%.

Here's an example of what calculating your DTI might look like:

Your monthly mortgage payment covers the loan principal, interest, property taxes, homeowners insurance, and possibly mortgage insurance (PMI). You’ll also need to budget for utilities and any homeowners association (HOA) fees. Our mortgage calculator takes all these into account to give you a clear estimate.

Formula for calculating monthly mortgage payments:

While a calculator is the easiest option, here’s the formula for those interested in calculating principal and interest manually:

Where:

• M is monthly mortgage payments
• P is the principal loan amount (the amount you borrow)
• r is the monthly interest rate

(annual interest rate divided by 12 and expressed as a decimal)

For example: if the annual interest rate is 6%,the monthly rate would be 0.06/12 = .00417, or .417%

• n is the total number of payments in months

For example:for a 30-year loan, n = 30×12 = 360 months

Here's a simple example:

This formula works for a fixed-rate mortgage, where the interest rate stays the same over the loan’s life. Don’t forget to include taxes, insurance, utilities, and HOA fees (if applicable) to get a full picture of your monthly expenses.

Play with different home prices, locations, down payments, interest rates, and mortgage lengths to see how they impact your monthly mortgage payments.

Increasing your down payment and decreasing your interest rate and mortgage term will lower your monthly payment. Taxes, insurance, and HOA fees vary by location. If your down payment is less than 20%, PMI costs will be added. We also include a utilities estimate you can break down by service. Add HOA fees if you’re buying a condo or in a community with an HOA.

We haven’t included savings for home maintenance/repairs or home improvement costs. To see how much home you can afford with these costs, check out the Kambia home affordability calculator.

Fun fact: Property tax rates are very localized. Homes of similar size and quality on either side of a municipal border can have different tax rates. Buying in an area with a lower property tax rate may help you afford a higher-priced home.

While exact property tax rates vary by county, it can be helpful to look at taxes on the state level to get an idea for taxes in your state. Here’s a helpful chart from Forbes breaking down the Census Bureau’s 2021 American Community Survey 5-year estimate:

Includes Taxes and Insurance

Our mortgage calculator shows your payments with property taxes and homeowners insurance included. These costs are often rolled into your monthly mortgage payments to ensure they stay current, protecting your investment and satisfying lender requirements.

• Property Taxes: Fund local services like schools, roads, and police. Even after paying off your mortgage, property taxes remain a responsibility.
• Homeowners Insurance: Required by lenders while you have a mortgage to protect the property. Once your mortgage is paid off, maintaining insurance is optional but recommended for protection against damages.

Calculates Mortgage Costs with PMI

Private mortgage insurance (PMI) helps you qualify for a mortgage without a 20% down payment. Opting for a lower down payment with PMI allows you to buy a home sooner and keep cash for future needs.

• PMI Removal: Automatically removed from conventional mortgages once home equity reaches 22%. You can also request removal when you reach 20% equity.

Includes HOA Fees

Our calculator factors in homeowners association (HOA) fees, which are common with condos, townhomes, and planned developments.

• HOA Fees: Cover maintenance of shared structures and amenities. They typically increase annually and may include special assessments for unexpected expenses.

Using Kassa’s mortgage calculator, you can get a comprehensive view of your total mortgage costs, helping you make informed financial decisions.

The lower the home price, the lower your loan amount will be. If the seller won’t negotiate, consider these options:

Extend the Length of Your Mortgage

Increasing your loan term, such as choosing a 30-year mortgage over a 15- or 20-year term, will reduce your monthly payments.

Increase Your Down Payment

A larger down payment reduces your loan amount and monthly payments. Putting down at least 20% avoids PMI (private mortgage insurance). Even a 5% increase in your down payment can lower PMI fees.

Get a Lower Interest Rate

A higher down payment can help you qualify for a lower interest rate by improving your loan-to-value ratio (LTV). Consider buying points to lower your rate if you plan to stay in your home for a while. For shorter stays, an adjustable-rate mortgage (ARM) offers a lower initial rate for a set period before adjusting.

Improving your credit score and reducing your debt-to-income ratio (DTI) can also increase your chances of securing a lower interest rate.

The easiest way to know if a home is in your budget is with a calculator! Try our home affordability calculator. Just enter your income, savings, and a few other details, and it will tell you the maximum amount of home you can afford.