Mortgage Affordability Calculator
Check whether a specific property fits within lender affordability limits.
Please note: Estimates only, not investment or legal advice. Property markets, taxes, fees and lending rules vary by location and change over time. Verify figures with a qualified professional before committing.
What the Mortgage Affordability Calculator does
This tests a specific property against the two ratios lenders use. The front-end ratio covers housing alone; the back-end adds every other debt payment. Both must pass, and the back-end is usually the harder one to clear.
Formula
Front-end ratio = Total housing cost ÷ Gross monthly income × 100Back-end ratio = (Housing + Other debts) ÷ Gross monthly income × 100Loan-to-value = Loan ÷ Property price × 100
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Property price | selected currency | Yes | Accepts 0 or more. |
| Down payment | selected currency | Yes | Accepts 0 or more. |
| Gross annual income | selected currency | Yes | Accepts 0 or more. |
| Existing monthly debt payments | selected currency | Optional | Accepts 0 or more. |
| Mortgage interest rate | % | Yes | — |
| Loan term | years | Yes | Accepts 1 or more. |
| Annual property tax | selected currency | Optional | Accepts 0 or more. |
| Annual home insurance | selected currency | Optional | Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Property price, Down payment, Gross annual income and Mortgage interest rate and 1 more.
- Optionally add Existing monthly debt payments, Annual property tax and Annual home insurance.
- Select Calculate.
Worked example
A $380,000 property, $76,000 down, $110,000 income, $400 debts, 6.5% over 30 years, $4,500 tax, $1,500 insurance.
- Price
- 380000
- Down
- 76000
- Income
- 110000
- Debts
- 400
- Rate
- 6.5
P&I $1,921 plus $500 escrow = $2,421. Front-end 26.4%, back-end 30.8%, LTV 80% — comfortably affordable.
Reading the result
- "Income needed to comfortably qualify" answers a different question than the verdict — it says what income would clear the 36% back-end ratio for this specific property, useful for judging how close a marginal pass or fail actually is.
- A loan-to-value above 80% adds mortgage insurance in most markets — that cost is not folded into "total monthly housing cost" here, so a high-LTV verdict of "affordable" understates the real monthly payment.
Assumptions and limitations
- This checks one fixed interest rate and term — it does not model rate variability between now and closing, or how limits differ across FHA, VA and conventional loan programmes; the 28/36 (comfortable) and 31/43 (stretch) thresholds used here are the common conventional guideline, not a universal rule.
- Property tax and insurance are entered as flat annual figures rather than recalculated against the property's actual assessed value.
Common mistakes
- Treating the verdict as equivalent to a specific lender's pre-approval — real underwriting also weighs credit score, cash reserves and employment history, none of which this ratio test includes.
- Reading "comfortably affordable" at a high loan-to-value without accounting for the mortgage insurance premium the loan-to-value figure itself is flagging.
Frequently asked questions
What if I fail the ratio test?
Increase the down payment, clear existing debts, extend the term, or look at a cheaper property. Clearing a car loan often moves the back-end ratio more than anything else.