The following chart shows you how interest rates affect how much home you can afford to purchase. To use it, find the monthly mortgage payment you feel you can handle, then look under the interest rate column to see what loan amount you can afford at various interest rates. As an example, if you can afford a monthly mortgage payment of $1,200, you could take out a loan of $200,150 at 6%. Your loan amount, and consequently the amount of home you could buy, would be reduced to $163,540 if rates were to rise to 8%.
The chart is computed assuming a 30-year fixed rate conventional loan. The figures listed include principal and interest only. Your monthly tax and insurance escrow will add to your total monthly mortgage payment.
Besides analyzing your income and expense, lenders are going to look to your ability to handle debt by scrutinizing your prior credit history. To do so, they will turn to a credit bureau to help establish your credit rating.
|
Interest Rate
|
|
Monthly Payment
|
5%
|
6%
|
7%
|
8%
|
|
|
|
$300
|
$55,884
|
$50,037
|
$45,092
|
$40,885
|
|
$400
|
$74,513
|
$66,717
|
$60,123
|
$54,513
|
|
$500
|
$93,141
|
$83,396
|
$75,154
|
$68,142
|
|
$600
|
$111,769
|
$100,075
|
$90,185
|
$81,770
|
|
$700
|
$130,397
|
$116,754
|
$105,215
|
$95,398
|
|
$800
|
$149,025
|
$133,433
|
$120,246
|
$109,027
|
|
$900
|
$167,653
|
$150,112
|
$135,277
|
$122,655
|
|
$1,000
|
$186,282
|
$166,792
|
$150,308
|
$136,283
|
|
$1,100
|
$204,910
|
$183,471
|
$165,338
|
$149,912
|
|
$1,200
|
$223,538
|
$200,150
|
$180,369
|
$163,540
|
|
$1,300
|
$242,166
|
$216,829
|
$195,400
|
$177,169
|
|
$1,400
|
$260,794
|
$233,508
|
$210,431
|
$190,797
|
|
$1,500
|
$279,422
|
$250,187
|
$225,461
|
$204,425
|
|
$1,600
|
$298,051
|
$266,867
|
$240,492
|
$218,054
|
|
$1,700
|
$316,679
|
$283,546
|
$255,523
|
$231,682
|
|
$1,800
|
$335,307
|
$300,225
|
$270,554
|
$245,310
|
|
$1,900
|
$353,935
|
$316,904
|
$285,584
|
$258,939
|
|
$2,000
|
$372,563
|
$333,583
|
$300,615
|
$272,567
|
|
$2,100
|
$391,191
|
$350,262
|
$315,646
|
$286,195
|
|
$2,200
|
$409,820
|
$366,942
|
$330,677
|
$299,824
|
|
$2,300
|
$428,448
|
$383,621
|
$345,707
|
$313,452
|
|
$2,400
|
$447,076
|
$400,300
|
$360,738
|
$327,080
|
|
$2,500
|
$465,704
|
$416,979
|
$375,769
|
$340,709
|
|
$2,600
|
$484,332
|
$433,658
|
$390,800
|
$354,337
|
|
$2,700
|
$502,960
|
$450,337
|
$405,830
|
$367,965
|
|
$2,800
|
$521,589
|
$467,017
|
$420,861
|
$381,594
|
|
$2,900
|
$540,217
|
$483,696
|
$435,892
|
$395,222
|
|
$3,000
|
$558,845
|
$500,375
|
$450,923
|
$408,850
|
|
