Mortgage Affordability Calculator
Estimate how much home you may be able to afford based on your income, debts, deposit, interest rate and loan term.
Overview
This mortgage affordability calculator helps you estimate how much home you may be able to afford using your household income, monthly debt payments, available deposit, mortgage rate and loan term. It is a quick way to compare budgets before applying for a mortgage.
How it works
The calculator first converts your annual income into monthly income. It then applies two common affordability checks: a housing-cost ratio and a total debt ratio that includes your existing monthly debts. The lower of those two limits becomes your estimated affordable monthly mortgage payment. That payment is then converted into a loan amount using a standard amortizing mortgage formula based on the interest rate and loan term. Finally, your deposit is added to estimate an affordable home price.
How to use this calculator
- 1Enter your gross annual household income.
- 2Add your existing monthly debt payments.
- 3Enter the deposit you plan to use.
- 4Input the mortgage interest rate and loan term.
- 5Set the housing and total debt ratios you want to use.
- 6Review the estimated home price, mortgage amount and monthly payment.
Example Calculation
Annual household income
$90,000
Monthly debt payments
$500
Available deposit
$50,000
Mortgage interest rate
7%
Loan term
30
Housing cost ratio
28%
Total debt ratio
36%
Estimated affordable home price
$382,243
With a household income of $90,000, monthly debts of $500 and a $50,000 deposit, the calculator estimates an affordable monthly payment of about $2,100, a mortgage amount of about $332,000 and a home price of about $382,000.
Frequently asked questions
What does this mortgage affordability calculator estimate?
It estimates an affordable monthly mortgage payment, the loan amount that payment could support and an estimated home price after adding your deposit.
Does this calculator include taxes and insurance?
No. This version treats the affordable housing payment as the mortgage payment only, so you may want to budget separately for taxes, insurance, HOA fees and maintenance.
Why are there two affordability ratios?
Many lenders and buyers use one ratio for housing costs alone and another for total monthly debt. Using both gives a more cautious affordability estimate.
What income should I enter?
Enter gross annual household income before tax, using a realistic figure that reflects the income you expect to rely on for the mortgage.
Can I use this calculator for different loan terms?
Yes. Changing the loan term affects both the monthly payment and the loan amount you may be able to afford.
Why might a lender offer a different amount?
Lenders may use different debt ratios, add taxes and insurance, check credit history, review cash reserves and apply their own underwriting rules.
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Assumptions and warnings
Assumptions
- Results are estimates based on the income, debt ratios, interest rate and term you enter.
- The monthly housing amount is treated as the mortgage payment only and does not separately include property taxes, insurance, HOA fees or utilities.
- Income is assumed to be gross household income before tax.
- The interest rate is assumed to stay constant for the full loan term.
Warnings
- This calculator provides an estimate only and is not financial advice.
- Lenders may use different affordability rules, credit checks, fees and stress tests.
- Speak to a qualified mortgage professional before making major financial decisions.