I've seen many young people having trouble calculating how much they can afford before borrowing money from the bank to buy their dream house. Actually the calculation is not that complicated. You can simply use the formula below.
monthly payment = (r / (1 - (1 + r) ^ -N)) * P
This is the formula for calculating the fixed monthly payment for a fixed rate mortgage. r stands for monthly interest rate (equals to annually interest rate divided by 12), N stands for the number of monthly payments (also known as the loan's term), and P stands for the amount borrowed (also known as the loan's principal).
Put in these three values, and work out the math. Not complicated, right? And there is an even easier way to do so, by using a
mortgage calculator, all you need to do is inputting the values, the calculator will do the math for you.
