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Mortgage Affordability Calculator – How Much Can You Borrow

Estimate borrowing power and the house price it supports from income, debts & deposit

📋 Your Details

Payment: M = P × [r(1+r)n] / [(1+r)n − 1]
Borrowable: invert that formula for P

Housing ≤ 28% of gross income; housing + debts ≤ 36%.

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Leave at 0 for a sole application.

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Loans, car finance, student loans, card minimums. Not rent, food or utilities.

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Other housing costs
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Monthly. UK users can put a service charge here; council tax is separate.

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Advanced lender rules
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UK lenders commonly test affordability at the pay rate plus about 3 percentage points.

Your entries are stored in this browser only and restored next time you open the page.

📊 Results

Maximum House Price
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Amount You Can Borrow
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Monthly Housing Payment
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Loan-to-Value
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Housing Ratio Used
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Total DTI Used
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📐 Affordability Rule of Thumb —
Binding Constraint
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Caps in Force
28% / 36%
Enter income to see how the 28/36 rule and your deposit interact.

📅 Year-by-Year Loan Schedule

Year Paid In Interest Principal Balance Equity
Adjust inputs to see results

How to Use the Mortgage Affordability Calculator

The free Mortgage Affordability Calculator estimates how much you can borrow and the house price that deposit plus loan will support. It uses income, existing debts, a deposit, the interest rate and term, then layers on tax, insurance, HOA and PMI. Switch between United States / International (28/36 rule) and United Kingdom (income multiple and rate stress) presets, or set custom ratios.

Step-by-Step Guide

1. Enter Income, Debts and Deposit

Start with the figures a lender will look at first:

2. Set the Loan and Housing Costs

Results update as soon as any input changes. The engine inverts the standard fixed-rate payment formula:

M = P × [r(1+r)n] / [(1+r)n − 1]

Here M is the monthly principal-and-interest payment, P is the loan, r is the monthly rate and n is the number of months. Tax, insurance, HOA and PMI are subtracted from your housing allowance before that inversion, then the price is iterated so those extras stay consistent with the resulting home value and LTV.

3. Read the Results

4. Use the Charts and Schedule

Common Scenarios & Examples

Scenario: United States / International household

Goal: see a comfortable purchase price under the 28/36 rule with a modest deposit and typical extras.

  1. Set Lending Region to United States / International.
  2. Enter Applicant 1 income of $90,000 (Applicant 2 at 0).
  3. Set Monthly Debt Payments to $500.
  4. Set Deposit to $40,000.
  5. Use 6.5% interest, 30 years, 1.10% tax, 0.35% insurance and PMI on.
  6. Watch price, loan, LTV and the monthly stack update live.
Sample inputs:
  • Gross income: $90,000
  • Monthly debts: $500
  • Deposit: $40,000
  • Rate / term: 6.5% over 30 years

Ballpark: housing room is 28% of $7,500/month = $2,100. After tax, insurance and PMI the supported price is typically a little under $300,000 — well below a simple “4× income” headline because extras consume part of the 28% cap.

Scenario: United Kingdom joint application

Goal: combine a 4.5× income multiple with a payment cap and a +3 pp stress test.

  1. Switch Lending Region to United Kingdom (term moves to 25 years; multiple and stress turn on).
  2. Enter Applicant 1 $50,000 and Applicant 2 $30,000.
  3. Set Monthly Debts to $250 and Deposit to $25,000.
  4. Use about 4.5% interest.
  5. Compare the 4.5× cap ($360,000 loan) with the payment- and stress-based loan. The lower figure binds.
Rule of thumb at 4.5× on combined $80,000:

Headline multiple = $360,000 loan + $25,000 deposit → $385,000 price. A +3 pp stress test often cuts that loan, which is why the calculator reports which constraint is binding.

Disclaimer & Limitations

Not a lender decision or professional advice: This tool is an educational estimate. Actual offers depend on credit history, employment, product rules, valuation and a full affordability assessment. Consult a qualified mortgage adviser or broker.

Assumptions: Gross income is used (not take-home). Contributions are treated as level monthly debts. Property tax and insurance are modelled as a percentage of price. PMI applies only above 80% LTV. UK council tax, stamp duty, legal fees, ground rent and help-to-buy schemes are not fully modelled — use the suite’s dedicated stamp-duty and moving-cost tools for those.

Stress and multiples: The 4–5× income range and +3 pp stress are typical illustrations, not a quote from any bank. Some lenders go higher for large deposits or certain professions; others are tighter.

Bug Reports and Suggested Improvements

Please email all suggestions for improvements and any bug reports to: mortgageaffordabilitycalc@personalfinances.me, thank you.