Mortgage Repayment Calculator: How Much Will Your Home Cost Each Month? (2023)

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With so many costs and variables at play, it can be difficult to budget when it comes to paying for a home.

A mortgage calculator can prove an indispensable tool when it comes to seeing what your monthly payments could look like against a range of different scenarios.

Our mortgage calculator allows for monthly household bills too, so you’ll get a good indication of the entire costs of running a property.

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(Video) How To Calculate Your Mortgage Payment

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(Video) How To Calculate Your Monthly Mortgage Payment Given The Principal, Interest Rate, & Loan Period

How to Use Our Mortgage And Household Bills Calculator

You can find a step-by-step guide of how to use the calculator below. Bear in mind it applies to repayment mortgages only, where you pay both the capital and interest with each monthly payment.

1. Enter the property price and deposit (either as a percentage or flat amount). You’ll find this on the left of the screen. If you don’t have a specific property in mind, you can experiment with the numbers to see what you may be able to afford.

2. Enter the interest rate. Use a comparison website or contact a mortgage broker to find out what kind of rates are available for your deposit level. You may have a rate from a lender already through a mortgage ‘agreement in principle’.

3. Select a mortgage term. To calculate your monthly mortgage payment, input the term of the mortgage in years. A maximum of 30 years is available on our calculator but bear in mind the term you are offered will depend on your age and circumstances.

4. Add in the cost of monthly household bills. If you want to see the full monthly cost of running your home, add in the cost of major bills, including council tax and broadband. If you’re not sure of these, the estate agent or local authority may be able to help.

5. Review your loan details. Now you’ve entered all the relevant information, the calculator will auto-populate your payment breakdown (on the right of the screen). You can see not only your monthly payments, but the estimated month and year by which you could pay off your mortgage if you continue to make them in full.

If you want to see how much of your mortgage repayments goes towards the interest on the mortgage versus the capital (what you actually borrowed), click on the ‘Repayment schedule’ tab. You can toggle between the annual and monthly view to see a breakdown of each monthly payment.

Free Mortgage Advice is a 5-star Trustpilot rated online mortgage adviser that can help you find the right mortgage - and do all the hard work with the lender to secure it. *Your home may be repossessed if you do not keep up repayments on your mortgage.

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What to consider when choosing a mortgage

A key factor when choosing a mortgage is your loan-to-value (LTV). Your LTV is the proportion of the property’s value you are borrowing as a mortgage. For example, if you buy a £200,000 property with a £20,000 (10%) deposit and £180,000 mortgage, your LTV will be 90%.

Every mortgage product has a maximum LTV. Some are set as low as 60% – these will be the cheapest deals. First-time buyers typically borrow at LTVs of 90% or 95%. In general, the lower your LTV, the lower the interest rate you’ll pay. You should only apply for a mortgage if you meet the LTV requirements.

The interest rate on a mortgage dictates how much it will cost you to borrow the money. The interest rate will either be fixed for a set amount of time, or variable. You may also have to pay an arrangement or booking fee to secure your mortgage, plus a lender’s valuation fee. These fees can vary between lenders and different mortgage deals.

You should also look at the early repayment charges (ERCs) attached to a mortgage deal. You will almost certainly have to pay ERCs for leaving a fixed rate mortgage before the fixed term ends.

How much can you afford to borrow?

The amount you can borrow as a mortgage largely depends on your income. Typically, mortgage lenders will lend you up to four times your annual salary. So, if you earn £50,000 a year, you’ll be able to borrow £200,000 as a mortgage.

However, running alongside this the lender will also carry out an affordability assessment to examine any financial commitments you have such as childcare, outstanding loans, credit cards or debts.

Interest-only or repayment

With a traditional repayment mortgage, your monthly payments comprise of interest and some of the capital you owe. At the end of the mortgage term, you’ll have repaid your mortgage in full and own your property outright.

With an interest-only mortgage you just pay the interest on your home loan. This means your monthly payments will be lower. But at the end of the term, you’ll still owe the mortgage lender the amount of money you originally borrowed.

Tips to lower your mortgage monthly payments

You can lower your monthly mortgage payments by doing one or more of the following. Just bear in mind that, the last two are not ‘saving’ you money, but storing up your debt for the future.

  • Put down a bigger deposit when you buy a property or pay off a lump sum on your mortgage
  • Find a mortgage with a lower interest rate
  • Extend the term of your mortgage
  • Pay your mortgage on an interest-only basis

Frequently Asked Questions

What are the different types of mortgage?

The two main types of mortgage are fixed rate and variable rate. With a fixed rate mortgage the interest rate, and therefore your monthly payments, are fixed for a set amount of time. This is normally two, three or five years, but can be longer.

When the fixed rate period ends, you’ll normally be moved to your lender’s standard variable rate (SVR).

With a variable rate mortgage the interest rate can change. If it changes your monthly payments will either go up or down. There are different types of variable rate mortgage, including SVR mortgages, trackers, discount mortgages, and capped rate mortgages.

(Video) How To Calculate Your Monthly Mortgage Payment

How do I apply for a mortgage?

You can apply for a mortgage directly to the lender or via a mortgage broker or financial adviser.

To apply you’ll need to show picture identification, utility bills from your current address, and proof of your income.

If you’re employed, you can show your payslips and/or your latest P60. If you’re self-employed, you’ll need two or three years’ SA302 tax forms or certified accounts.

The lender will also want to see three to six months’ bank statements to carry out an affordability assessment. It will also carry out a credit check to see how you’ve handled credit in the past.

How long does it take to be approved for a mortgage?

There’s no definitive rule about how long it takes to be approved for a mortgage, but it normally takes two to four weeks from application to mortgage offer.

During this time period the lender may ask you for more information – the quicker you can provide this, the sooner your mortgage will be approved.

Since the Covid pandemic, lenders may ask for extra information if you were furloughed or received help from the Self-Employment Income Support Scheme (SEISS).

How long do mortgage offers last for?

Mortgage offers are usually valid for between three and six months. If you don’t complete on your purchase in this time period, you may be able to get the offer extended. If the mortgage offer can’t be extended, you’ll have to start the application process from scratch.

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How much does a house payment cost each month? ›

The average monthly housing cost is $1,427, according to the 2021 Census housing data. The median monthly housing cost is $1,101, according to the 2021 Census housing data.

How to calculate monthly payments on a repayment mortgage? ›

What's the formula for calculating mortgage payments?
  1. r = Annual interest rate (APRC)/12 (months)
  2. P = Principal (starting balance) of the loan.
  3. n = Number of payments in total: if you make one mortgage payment every month for 25 years, that's 25*12 = 300.

How much should your mortgage be of your monthly pay? ›

The 28% rule says you should keep your mortgage payment under 28% of your gross income (that's your income before taxes are taken out). For example, if you earn $7,000 per month before taxes, you could multiply $7,000 by . 28 to find that you should keep your mortgage payment under $1,960, according to this rule.

How much does 1 percent save on 30-year mortgage per month? ›

As you'll see in the table below, a 1% difference between a $200,000 home with a $160,000 mortgage increases your monthly payment by almost $100. Although the difference in monthly payment may not seem that extreme, the 1% higher rate means you'll pay approximately $30,000 more in interest over the 30-year term.

Is $2,000 a month too much for a mortgage? ›

With $2,000 per month to spend on your mortgage payment, you are likely to qualify for a home with a purchase price between $250,000 to $300,000, said Matt Ward, a real estate agent in Nashville. Ward also points out that other financial factors will impact your home purchase budget.

How much is a 200k mortgage per month? ›

On a $200,000, 30-year mortgage with a 4% fixed interest rate, your monthly payment would come out to $954.83 — not including taxes or insurance. But these can vary greatly depending on your insurance policy, loan type, down payment size, and more.

How do you calculate monthly installment? ›

The equation to find the monthly payment for an installment loan is called the Equal Monthly Installment (EMI) formula. It is defined by the equation Monthly Payment = P (r(1+r)^n)/((1+r)^n-1). The other methods listed also use EMI to calculate the monthly payment. r: Interest rate.

Will interest rates go down in 2023? ›

When it becomes more attractive to save money, consumers tend to spend less of it. But the Fed isn't done fighting inflation. And because of that, consumers should not expect interest rates to drop in 2023. However, rates may also not climb much from where they are today.

Will my mortgage payment go down after 5 years? ›

Do Mortgage Payments Go Down Over Time? With a typical fixed-rate loan, no — your mortgage payment will not decrease over time. However, your mortgage payments' makeup does change over time because of how your amortization schedule — the schedule of your payments — distributes interest payments and principal payments.

How much house can I afford if I make $36,000 a year? ›

For example, if you make $3,000 a month ($36,000 a year), you can afford a mortgage with a monthly payment no higher than $1,080 ($3,000 x 0.36). Your total household expense should not exceed $1,290 a month ($3,000 x 0.43). How much house can I afford with an FHA loan?

How much income do you need to buy a $650000 house? ›

To determine whether you can afford a $650,000 home you will need to consider the following 4 factors. Based on the current average for a down payment, and the current U.S. average interest rate on a 30-year fixed mortgage you would need to be earning $126,479 per year before taxes to be able to afford a $650,000 home.

What is the 28 36 rule? ›

A household should spend a maximum of 28% of its gross monthly income on total housing expenses according to this rule, and no more than 36% on total debt service. This includes housing and other debt such as car loans and credit cards. Lenders often use this rule to assess whether to extend credit to borrowers.

How much does 1% difference make in a mortgage? ›

Mortgage rates increase in increments of 0.125%, and although one percent may seem like an insignificant amount, a quick glance at the numbers would tell you otherwise. As a rough rule of thumb, every 1% increase in your interest rate lowers your purchase price you can afford for the same payment by about 10%.

Will mortgage rates go down in 2024? ›

Fannie Mae, Mortgage Bankers Association and National Association of Realtors expect mortgage rates to drop through the first quarter of 2024, by half a percentage point to about nine-tenths of a percentage point. Figures are the predicted quarterly average rates for the 30-year fixed-rate mortgage.

Is it smart to buy down interest rate? ›

If you are buying a home and have some extra cash to add to your down payment, you can consider buying down the rate. This would lower your payments going forward. This is a particularly good strategy if the seller is willing to pay some closing costs. Often, the process counts points under the seller-paid costs.

What income do you need for a 400k mortgage? ›

Assuming a 30-year fixed conventional mortgage and a 20 percent down payment of $80,000, with a high 6.88 percent interest rate, borrowers must earn a minimum of $105,864 each year to afford a home priced at $400,000. Based on these numbers, your monthly mortgage payment would be around $2,470.

How much house can I afford if I make $70,000 a year? ›

If you're an aspiring homeowner, you may be asking yourself, “I make $70,000 a year: how much house can I afford?” If you make $70K a year, you can likely afford a home between $290,000 and $360,000*. That's a monthly house payment between $2,000 and $2,500 a month, depending on your personal finances.

How much do you need to make to afford a 300K house? ›

How much do I need to make to buy a $300K house? To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate.

What salary can afford a 200k house? ›

What income is required for a 200k mortgage? To be approved for a $200,000 mortgage with a minimum down payment of 3.5 percent, you will need an approximate income of $62,000 annually.

What is the monthly payment on a 300k mortgage? ›

On a $300,000 mortgage with a 3% APR, you'd pay $2,071.74 per month on a 15-year loan and $1,264.81 on a 30-year loan, not including escrow. Escrow costs vary depending on your home's location, insurer, and other details.

What house can I get with a 200k salary? ›

There are a ton of variables, and these are just loose guidelines. That said, if you make $200,000 a year, it means you can likely afford a home between $400,000 and $500,000.

How much interest do you pay on a 30-year loan? ›

30-year mortgage options
Mortgage typeAverage ratesRequired down payment
15-year fixed2.860%At least 3% of the purchase price
30-year fixed3.41%As low as 0% of the purchase price for some loan types

How to calculate loan repayment? ›

Divide the interest rate you're being charged by the number of payments you'll make each year, usually 12 months. Multiply that figure by the initial balance of your loan, which should start at the full amount you borrowed.

How can I lower my home loan interest rate? ›

How to Reduce Home Loan Interest Rates
  1. Opt for a Shorter Term: ...
  2. Prepayments are a Viable Option Too: ...
  3. Online Interest Rate Comparison. ...
  4. Balance Transfer on a Home Loan Could Be an Option. ...
  5. Pay a Larger Down Payment. ...
  6. Look for Better Offers. ...
  7. Boost your EMI. ...
  8. Conclusion.

How high will home interest rates go in 2023? ›

Mortgage rate predictions for 2023

National Association of Realtors and Wells Fargo sit at the low end of the group, predicting the average 30-year fixed interest rate to settle at 6.3% for Q2. Meanwhile, Fannie Mae and the Mortgage Bankers Association have the highest forecasts of 6.4%.

What will interest rates be in 2023 2024? ›

Direct Loan Interest Rates for 2023-2024
Loan Type10-Year Treasury Note High YieldFixed Interest Rate
Direct Subsidized Loans and Direct Unsubsidized Loans for Undergraduate Students3.448%5.50%
Direct Unsubsidized Loans for Graduate and Professional Students3.448%7.05%
1 more row
May 16, 2023

How high will interest rates be in 2023? ›

So far in 2023, the Fed raised rates 0.25 percentage points twice. If they hike rates at the May meeting, it is likely to be another 0.25% jump, meaning interest rates will have increased by 0.75% in 2023, up to 5.25%.

At what age should you pay off your mortgage? ›

In fact, O'Leary insists that it's a good idea to be debt-free by age 45 -- and that includes having your mortgage paid off. Of course, it's one thing to shed a credit card balance by age 45. But many people don't first buy a home until they reach their 30s.

What happens if I pay 2 extra mortgage payments a year? ›

Making additional principal payments will shorten the length of your mortgage term and allow you to build equity faster. Because your balance is being paid down faster, you'll have fewer total payments to make, in-turn leading to more savings.

What to do if mortgage is too high? ›

Some options that your servicer might make available include:
  1. Refinance.
  2. Get a loan modification.
  3. Work out a repayment plan.
  4. Get forbearance.
  5. Short-sell your home.
  6. Give your home back to your lender through a “deed-in-lieu of foreclosure”
Sep 9, 2020

How much do you have to make a year to afford a $400 000 house in California? ›

The annual salary needed to afford a $400,000 home is about $165,000. Over the past two years, home prices have skyrocketed amid the combined impacts of a global pandemic and housing inventory shortages. Between 2020 and 2022, home prices soared 30%, according to Freddie Mac.

How much house can I afford if I make $100000 a year? ›

A 100K salary means you can afford a $350,000 to $500,000 house, assuming you stick with the 28% rule that most experts recommend.

How much do you have to make a year to afford a 500 000 house? ›

To afford a $500,000 home, a person would typically need to make about $140,000 a year, said economic data analyst Hannah Jones. The principal and interest payments would total $2,791 per month, and with taxes and insurance, that number comes up to $3,508.

How much income do you need to buy a $800000 house? ›

For homes in the $800,000 range, which is in the medium-high range for most housing markets, DollarTimes's calculator recommends buyers bring in $119,371 before tax, assuming a 30-year loan with a 3.25% interest rate. The monthly mortgage payment is estimated at $2,785.

Can I afford a house making 80000 a year? ›

For the couple making $80,000 per year, the Rule of 28 limits their monthly mortgage payments to $1,866. Ideally, you have a down payment of at least 10%, and up to 20%, of your future home's purchase price. Add that amount to your maximum mortgage amount, and you have a good idea of the most you can spend on a home.

How much income is needed for a 800k mortgage? ›

If you are asking, what is required for an $800,000 loan, my general answer would be that the rule of thumb is typically 25% of the loan. So, generally speaking income should be at least $200,000 gross per annum.

What is the 3 7 3 rule in mortgage? ›

Timing Requirements – The “3/7/3 Rule”

The initial Truth in Lending Statement must be delivered to the consumer within 3 business days of the receipt of the loan application by the lender. The TILA statement is presumed to be delivered to the consumer 3 business days after it is mailed.

What is the 2% rule for mortgages? ›

The 2% rule is the same as the 1% rule – it just uses a different number. The 2% rule states that the monthly rent for an investment property should be equal to or no less than 2% of the purchase price. Here's an example of the 2% rule for a home with the purchase price of $150,000: $150,000 x 0.02 = $3,000.

What is the minimum FICO score to qualify for a home loan? ›

The minimum credit score needed for most mortgages is typically around 620. However, government-backed mortgages like Federal Housing Administration (FHA) loans typically have lower credit requirements than conventional fixed-rate loans and adjustable rate mortgages (ARMs).

What is the average mortgage payment for a $300 000 house? ›

On a $300,000 mortgage with a 3% APR, you'd pay $2,071.74 per month on a 15-year loan and $1,264.81 on a 30-year loan, not including escrow. Escrow costs vary depending on your home's location, insurer, and other details.

How much house can I afford if I make $5000 a month? ›

Figure out 25% of your take-home pay.

Let's say you earn $5,000 a month (after taxes). According to the 25% rule I mentioned, that means your monthly house payment should be no more than $1,250.

How much is a downpayment on a 500k house? ›

For a $500,000 home, a 20% down payment would be $100,000. At a 5.5% rate, the monthly payment for this would be $2,940 (this includes taxes and insurance - scroll down to see how much local taxes can impact your monthly payment and may alter this number for you).

What is the monthly payment on a 600000 mortgage? ›

Monthly payments on a $600,000 mortgage

At a 7.00% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total $3,992 a month, while a 15-year might cost $5,393 a month.

Can I afford a 300k house on a $70 K salary? ›

On a $70,000 income, you'll likely be able to afford a home that costs $280,000–380,000. The exact amount will depend on how much debt you have and where you live — as well as the type of home loan you get.

What is the house payment on a $800000 house? ›

Monthly payments on an $800,000 mortgage

At a 7.00% fixed interest rate, your monthly mortgage payment on a 30-year mortgage might total $5,322 a month, while a 15-year might cost $7,191 a month.

What is the monthly payment on a 500k mortgage? ›

The average mortgage rate for a $500,000, 30-year fixed-rate loan is around 5.4% for those with good credit. So, your monthly payment would be around $2250 without taxes and fees. Of course, it could be less if you could secure a better rate or make a sizeable down payment.

Can I afford a 500k house on 100K salary? ›

A 100K salary means you can afford a $350,000 to $500,000 house, assuming you stick with the 28% rule that most experts recommend.

Can I afford a 500k house on 200k salary? ›

A mortgage on 200k salary, using the 2.5 rule, means you could afford $500,000 ($200,00 x 2.5). With a 4.5 percent interest rate and a 30-year term, your monthly payment would be $2533 and you'd pay $912,034 over the life of the mortgage due to interest.

Can I buy a 300K house with 60k salary? ›

To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate.

How much is a mortgage on a 1 million dollar house? ›

A 30-year, $1,000,000 mortgage with a 4% interest rate costs about $4,774 per month — and you could end up paying over $700,000 in interest over the life of the loan. Our goal is to give you the tools and confidence you need to improve your finances.

How much is a $600,000 mortgage payment for 30 years? ›

Monthly Payment For a $600,000 Mortgage

With a 5% down payment ($30,000) and an interest rate of 6%, you would pay $3417 monthly for a 30-year fixed-rate loan, not including taxes and insurance. For a 15-year fixed-rate loan, it would be $4809.

What are interest rates right now? ›

Current mortgage and refinance interest rates
ProductInterest RateAPR
30-Year Fixed Rate7.12%7.14%
20-Year Fixed Rate6.84%6.87%
15-Year Fixed Rate6.47%6.50%
10-Year Fixed Rate6.67%6.69%
5 more rows

How much do you need to make for a $700 000 mortgage? ›

You need to make $259,022 a year to afford a 700k mortgage. We base the income you need on a 700k mortgage on a payment that is 24% of your monthly income.


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