Mortgage Affordability Calculator

What Is a Mortgage Affordability Calculator?

This free mortgage affordability calculator tells you how much you can borrow for a home loan — based on your income, existing debts, deposit, interest rate, and living expenses. Unlike a basic mortgage repayment calculator that starts with a loan amount, this mortgage affordability calculator works backwards from your financial situation to tell you your maximum borrowing capacity and the home price range you can realistically afford.

In fact, “how much can I borrow for a mortgage?” is one of the most important financial questions you will ever ask. This mortgage affordability calculator gives you a comprehensive answer — including your debt-to-income ratio, stress-tested borrowing limit, and how your affordability changes across different interest rate scenarios.

How Does This Mortgage Affordability Calculator Work?

This mortgage affordability calculator applies both the front-end DTI ratio (housing costs only, ideally under 28%) and the back-end DTI ratio (all debts including housing, ideally under 43%) to find the lower of the two limits — giving you the more conservative and realistic borrowing figure.

What Is the Debt-to-Income (DTI) Ratio?

The DTI ratio is the single most important number lenders use to assess your mortgage application. This mortgage affordability calculator calculates both:

• Front-End DTI (Housing Ratio): Your monthly housing costs (mortgage payment + property tax + insurance) as a percentage of gross monthly income. Lenders typically want this below 28%. This mortgage affordability calculator uses 28% as the standard benchmark.
• Back-End DTI (Total Debt Ratio): All monthly debt payments (housing + car loans + student loans + credit cards + other) as a percentage of gross monthly income. Most lenders require this below 43%, though some allow up to 50% for well-qualified borrowers.

What Is a Stress Test in This Mortgage Affordability Calculator?

A stress test checks whether you could still afford your mortgage if interest rates rise. This mortgage affordability calculator shows your affordability at your entered rate plus 2% — a common stress test margin used by lenders in Australia, Canada, and the UK. If you cannot afford the mortgage at the stress-tested rate, most lenders will not approve the loan even if you can afford it today.

How Much Deposit Do I Need?

• United States: Minimum 3–5% for conventional loans (with PMI). 20% avoids Private Mortgage Insurance and typically gets better rates.
• Australia: Minimum 5% for most lenders. 20% avoids Lenders Mortgage Insurance (LMI). First Home Buyer schemes may allow 5% with government guarantee.
• United Kingdom: Minimum 5–10%. 15–20% unlocks significantly better interest rates. Stamp Duty and legal costs are additional.
• Canada: Minimum 5% for homes under CA$500,000. 10% on the portion between $500,000–$999,999. 20% for homes $1M+. CMHC mortgage insurance applies below 20%.

Is This Mortgage Affordability Calculator Accurate?

This mortgage affordability calculator gives a well-informed estimate based on standard lending ratios. However, actual mortgage approval depends on many additional factors including your credit score, employment type and history, asset reserves, specific loan product, and individual lender policies. According to the Consumer Financial Protection Bureau (CFPB), a DTI ratio of 43% is typically the maximum for a qualified mortgage in the United States.

Mortgage Affordability Calculator — Frequently Asked Questions