Rent Payment Mortgage Affordability Calculator
Have you ever wondered what size mortgage you can afford based on your monthly rent payment? Our Rent Payment Mortgage Affordability Calculator enables you to determine the home loan you could afford if your monthly rent payment was your mortgage payment. The calculator takes into account your monthly debt payments such as for credit card, car and student loans, as well as current mortgage rates, to show you the 30 year fixed rate and 15 year fixed rate mortgage you could afford based on your current rent expense. Our Rent Payment Mortgage Affordability Calculator also determines the monthly gross income required to qualify for these mortgages which you can compare to your current income. Please note that multiple factors such as your down payment, credit score and debt-to-income ratio 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. Our Rent Payment Mortgage Affordability Calculator shows how your monthly rent payment converts into a fixed rate mortgage.
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.
Mortgage Qualification Requirements
The process to qualify for a mortgage tends to be more rigorous than qualifying to rent a property. Lenders review multiple mortgage qualification requirements including your credit score, debt-to-income ratio and employment history. In many cases, you may be permitted to spend more on your monthly rent than a lender would permit you to spend on your mortgage payment and other housing expenses including property tax, homeowners insurance and homeowners association (HOA) dues, if applicable, which limits what size mortgage you qualify for. Our Rent Payment Mortgage Affordability Calculator determines how much money you need to make to qualify for the mortgage you could afford based on your rent, which may be higher than your actual income.
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