Home Affordability Calculator

How much house you can afford is a different question from how much a lender will approve, and conflating the two is how people end up house-rich and cash-poor. Lenders lean on ratios; affordability is about what leaves you room to live.

The traditional guideline is the 28/36 rule. Housing costs — mortgage principal, interest, taxes and insurance — should stay under about twenty-eight per cent of gross monthly income, and all debt payments combined under about thirty-six per cent. These are ceilings, not targets. Being at the top of the range leaves nothing spare for the repair bill, the rate reset or the month the boiler dies.

This calculator starts from those ratios, sets aside a slice for taxes and insurance, then works backward to a loan amount and a home price using your rate and term. The result is the price where the payment fits the guideline, given your existing debts. If your other debts are high, the affordable price falls even if the salary looks large, because the lender is looking at total obligations.

The down payment shifts the picture in two ways. A bigger down payment reduces the loan and the payment, and it usually earns a slightly lower interest rate because the lender's risk falls. Under twenty per cent, expect mortgage insurance that adds to the monthly cost. A lower rate and a longer term reduce the monthly figure but raise the total interest, so a "more affordable" loan can cost far more over time.

Treat the range as a starting point for house-hunting, not a spending permission slip. Aim below your maximum, keep an emergency buffer, and get pre-approval to confirm the numbers your lender will actually use. This is a general estimate for planning, not financial or lending advice.

This calculator returns estimates for general information only. It is not financial, investment, tax or legal advice, and it cannot replace guidance from a qualified professional who knows your circumstances. Figures such as loan payments, investment growth and retirement projections are simplified models based on the inputs and assumptions you provide, not guarantees of future results.