How to use it
- Enter Loan amount.
- Enter Annual rate %.
- Enter Term (years).
The formula
Max payment ≈ 28% of gross monthly income.
Worked example
On $80,000 income with low debts, many lenders target a housing payment near $1,900/month.
Frequently asked questions
What is the 28/36 rule?
Housing ≤28% of gross income; total debt ≤36%.
Does down payment matter?
Yes — a larger down payment lowers the loan and the payment.
Tips
- Compare the total interest, not just the monthly payment.
- A larger down payment lowers both the loan and any insurance.
- Even small extra principal payments cut years off the term.
Key terms
- Principal
- The amount borrowed, before interest.
- Amortization
- Spreading repayment into equal periodic payments.
- Escrow
- Funds held for taxes and insurance.