Can You Afford Your Mortgage?

The calculator then presents the minimum yearly income required to satisfy both ratios for a series of eight different interest rates at 0.25% intervals.

Say you want to take out a $200,000 30-year mortgage on a $250,000 home. Your monthly liabilities include $170 in outstanding student loans and $500 in long-term credit card debt (meaning you're carrying the balance for more than 10 months). Your real estate taxes are $3,000, and you pay $1,200 a year in homeowner's insurance. An interest rate of 5.75% on your loan would require you to earn $72,905 before taxes. With a rate of 6.00%, that income rises to $73,970.

The calculator determines the required incomes based on the specific ratios. A lender, however, may be more or less flexible based on a more complete consideration of your financial situation, including any additional assets you may have.

Also, remember that increasing the down payment would reduce the size of the loan and in most cases qualify you for a lower rate, thereby lowering your required income as well.

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