This calculator calculates a range of monthly mortgage payments for two underwriting scenarios: one that uses aggressive underwriting guidelines and one that uses conservative guidelines.
The calculator uses the lower of two ratios for each set of results: payment-to-income ratio (also called housing ratio) and debt-to-income ratio (also called debt ratio).
When the economy is strong, lenders are more aggressive and raise these ratios to compete for business. When the economy is weak, lenders are more conservative and lower their ratios.
Mortgage payments are shown for a range of down payments that are in the range of your estimated down payment. Amounts are shown for principal and interest (P+I) and combined (P+I+T+I) payments. Combined payments include insurance, taxes, and private mortgage insurance where applicable.
The following housing ratios are used for conservative results: 29% for down payments of less than 20% and 30% for down payments of 20% or more. A debt ratio of 36% is used for all down payments.
The following ratios are used for aggressive results: housing and debt ratios of 31% and 38%, respectively, for down payments of less than 10%; housing and debt ratios of 32% and 40%, respectively, for down payments of 10% or more but less than 20%; and housing and debt ratios of 33% and 41%, respectively, for down payments of 20% or more.