Home Affordability Calculator

Banks decide what you can borrow with two ratios older than most banks' software: housing costs within 28 percent of gross monthly income, and all debt payments within 36. Between those lines and your down payment sits the actual ceiling on what you can buy, and it is knowable in a minute, which makes viewing homes above it a strange hobby the property industry actively encourages.

This calculator runs the ratios in the open: income, existing debts, rate, term and deposit in; maximum payment, loan and price out, with the binding constraint named. Sometimes the housing ratio caps you, but for anyone carrying car loans and cards it is usually the total-debt line, which quietly means the fastest way to afford more house is often to clear a loan, not to earn more.

How to use

1. Enter gross monthly income, before tax, for everyone on the application.
2. Enter existing monthly debt payments: car loans, cards' minimums, student loans.
3. Set the mortgage rate and term you expect, and the down payment you have.
4. Read the ceiling: maximum monthly payment, loan and price, with which ratio binds.
5. If the total-debt ratio binds, note what clearing a loan does to the ceiling; it is often startling.
6. Set your own viewing budget below the ceiling; the difference is your life.

Why use our home affordability calculator?

Knowing the binding constraint is the actionable part. When the 36-percent line binds, every unit of monthly debt payment subtracts several times itself from the price ceiling through the mortgage arithmetic: clearing a 400-a-month car loan can raise the ceiling by tens of thousands, a trade nobody at the showroom mentions. When the housing line binds, income and rate are the levers. The calculator names which world you are in, which converts vague affordability anxiety into a specific to-do list, usually starring the debt payoff planner.

The ceiling-versus-budget distinction is stated with intent: the ratios are the bank's protection, not your comfort, and living at the ceiling leaves nothing for the boiler, the child or the rate rise. The number to carry into viewings is your own, set below the bank's, and deciding it at a desk beats deciding it in a bidding war. Lenders also vary, stretching to 43 percent total debt in some markets, so the classic 28/36 here is the conservative baseline it always was. The rent vs buy calculator asks whether to buy at all, and the down payment calculator grows the deposit that moves every number here.

The two-ratio structure also explains a pattern that confuses buyers: two households with identical incomes receiving very different ceilings. The debt-free household is housing-ratio bound and hears a big number; the car-financed, card-carrying household is debt-ratio bound and hears a smaller one, sometimes dramatically so. Neither bank is being arbitrary; the ratios are just pricing different balance sheets, and the calculator shows exactly which line is doing it to yours.

What a lender will approve and what you can comfortably carry are rarely the same figure. The CFPB's preparing to shop for your mortgage is written around that gap.

Who is this tool for?

First-time buyers run it before their first viewing and are spared the classic heartbreak of falling for a home the ratios were never going to allow. Couples run it with both incomes and all debts and get the honest combined ceiling plus the debt-clearing insight that often reshapes their year.

People planning a purchase in two years use it in reverse: pick a target price and see what deposit and debt position make the ratios work, which becomes a plan with monthly numbers. And anyone whose broker quotes a surprisingly high ceiling runs the classic ratios to see how much stretch is in the quote, information worth having before borrowing at the edge.

Frequently asked questions