Using a Mortgage Affordability Calculator

The mortgage affordability calculator is a tool that lets you know just how large a mortgage you can afford. This amount depends on several factors such as the level of income you earn, your debt level, interest rates and credit history.

In addition to your personal financial qualifications, banks and mortgage lenders also consider the location and condition of the property when deciding how much to loan. Solid investment properties provide less risk to the lender, who in turn can offer more attractive interest rates.

How to Use the Affordability Calculator

To use the calculator, you must input three pieces of information:

1. The mortgage interest rate
,
2. The term of the mortgage loan (in years), and
3. The amount of monthly mortgage payment that you can afford to pay.

The last input (how much you can afford to pay) must be realistic and truthful or else the results will be faulty.

It is important to remember that the results from the affordability calculator should be used as a guide only and not taken as gospel. This is because mortgage lenders have their own guidelines, and these can vary among lenders. That's why it's important to contact several lenders to get the best deal that fits your needs.

More information about mortgages can be found in The Landlord's Library book collection.

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