Calculate the Mortgage You Can Afford Based on Your Rent and Connect with Top Lenders
Use the FREEandCLEAR Rent Payment Mortgage Affordability Calculator to determine what size mortgage you could afford if your monthly rent payment was your mortgage payment. Please note that multiple factors such as your monthly income, debt and credit score will determine your ability to qualify for a mortgage. When you submit your information we connect you with up to four leading lenders so that you can confirm your mortgage terms and find the mortgage that is right for you. We also offer a version of this calculator that does not require personal information
Monthly Housing Payments
- Loan Type
Key Buy Versus Rent Considerations
Total Monthly Housing Expense When You Own a Home
In addition to making a monthly mortgage payment homeowners are responsible for paying property taxes, homeowners insurance and other potentially applicable housing-related expenses such as mortgage insurance and homeowners association (HOA) dues. Additionally, homeowners are also responsible for ongoing property upkeep, maintenance and repairs. You should consider all the costs that go into total monthly housing expense, and not just compare a mortgage payment to your rent payment, when evaluating if you should rent or buy a home.
Fixed Monthly Mortgage Payments
One of the main benefits of owning a home is that your monthly mortgage payment is fixed for up to thirty years, if you select a fixed rate mortgage. By comparison, your rent payment is subject to increase annually. In the long run, having a fixed mortgage payment offers significant financial benefits and certainty as compared to a monthly rent payment which is subject to increase every year.
Share in Property Appreciation and Depreciation
Another factor to consider when owning a home is that you share in any change in property value. If your property value increases you share in the appreciation and on the other hand, if your property value decreases you also share in the depreciation. Home ownership provides upside in the event your property value goes up but also risk in the event your property value goes down. If your property value declines you could lose part or all of the down payment you made to buy the home. Renters are not impacted by a change in the value of the property they rent.
Getting a mortgage and buying a home are significant long-term financial obligations as compared to the flexibility afforded by renting. Mortgages are typically fifteen-to-thirty years in length and borrowers are responsible for major repairs or renovations required to maintain the property. By comparison, most leases are usually one year in length and renters are not responsible for property repairs. Prospective home buyers must be comfortable with the increased financial responsibility and commitment that comes with owning a home.
More FREEandCLEAR Mortgage Resources
Review the pros and cons of renting versus buying a home to understand what option makes the most sense for you
Understand the financial trade-offs between renting and buying a home over the long term when you factor in all the expenses that go into owning a home including property tax and insurance
Use our Buy Versus Rent Comparison Calculator to compare buying a home to renting a home include monthly payment, total monthly housing expense and return on invesment
Compare mortgage rates and fees from top lenders near you. Comparing rates and fees for multiple lenders is the best way to save money on your mortgage