Formula for Affording a Mortgage?

The general rule is that you can afford a mortgage that is 2x to 2.5x your gross income. Total monthly mortgage payments are typically made up of four components: principal, interest, taxes, and insurance (collectively known as PITI).

What is the formula to calculate a mortgage?

You can calculate your monthly mortgage payment, not including taxes and insurance, using the following equation: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1] P = principal loan amount. i = monthly interest rate. n = number of months required to repay the loan.

What is the formula for calculating a 30 year mortgage?

Multiply the number of years in your loan term by 12 (the number of months in a year) to get the number of total payments for your loan. For example, a 30-year fixed mortgage would have 360 payments (30x12=360).