July 1, 2006
A mortgage calculator helps to estimate interest rates and home equity gains when choosing a mortgage lender, whether you’re in USA, Canada or UK
Mortgage calculation is based on two simple rules that lenders use to determine how much of a mortgage payment you can afford.
The first rule is that your monthly housing costs should not exceed 32% of your gross monthly household income.
Housing costs include taxes, monthly mortgage payments, and heating expenses. If you live in a condominium, this sum should also include half of monthly condominium fees.
The second rule is that your entire monthly debt load should not be any more than 40% of your gross monthly income. This includes housing costs, and other debts such as personal loans, car payments, and credit card payments.