Home Affordability Calculator

The Home Affordability Calculator shows you the maximum property price a lender is likely to approve based on your income, existing debts, and deposit, using the standard rules that underwriters actually apply.

Select your region (US, UK, or EU) to switch between the 28/36 DTI rule (US) and the income multiple approach (UK/EU).

This calculator is for illustration only. It does not constitute financial advice. Lending decisions depend on your credit score, employment, lender policy, and many other factors. Always speak to a qualified mortgage adviser before making purchasing decisions.

How to Use

1. Region: select US, UK, or EU with the top-right toggle. This changes both the rule applied and the currency displayed.
2. Annual Income: enter your gross (pre-tax) household income. For joint applications, combine both incomes.
3. Monthly Debt Payments: enter the total of existing monthly obligations: car loans, student loans, credit card minimums. Do not include the new mortgage itself.
4. Deposit / Down Payment: enter the cash you have available upfront.
5. US only: enter your expected interest rate and mortgage term. These are needed to invert the payment formula into a loan amount.
6. UK/EU only: adjust the income multiple slider (3× to 5.5×). The calculator shows conservative, typical, and aggressive bands automatically.
7. Read the result: the headline "Max Price" appears in the bottom bar. Switch to the Results tab for the full breakdown and scenario table.

The US 28/36 DTI Rule

The debt-to-income ratio (DTI) is the share of gross monthly income that goes to debt payments. US mortgage underwriters enforce two simultaneous limits:

The binding limit is whichever produces the lower maximum payment. In practice, the 28% front-end cap is the tighter constraint for most borrowers with modest existing debt.

Example. Gross income of $95,000/year\to monthly$7,917.

• Front-end cap: 28% × $7,917=\ast \ast$2,217/month**
• Back-end cap: 36% × $7,917-$250 existing debts = $2,600/month

The front-end limit of $2,217binds.At6.6$325,300, a max purchase price of ~$388,300witha$63,000 down payment.

Source: CFPB, What is a debt-to-income ratio?

UK Income Multiples

UK lenders do not use the DTI framework. Instead, they cap borrowing at a multiple of gross annual income, typically 4 to 4.5× for most applicants, with some lenders offering 5× or 5.5× in specific circumstances.

The income-multiple cap is set at a portfolio level: the Prudential Regulation Authority (PRA) requires lenders to cap the share of mortgages above 4.5× income at 15% of new lending. This effectively means most borrowers are offered 4–4.5×.

Stress testing. Lenders also stress-test affordability at a rate roughly 3 percentage points higher than the initial rate, per FCA and PRA rules introduced after the 2014 Mortgage Market Review. Even if the income multiple is met, the stressed payment must fit your income. This calculator does not perform stress testing; it models the income-multiple cap only.

Existing debts. This calculator adjusts for monthly debts by annualising them and subtracting from income before applying the multiple:

$$\text{maxLoan}=(\text{annualIncome}-12\times \text{monthlyDebts})\times \text{multiple}$$

Example. Income £62,000, monthly debts £250, multiple 4.5×:

• Net income = £62,000 − (12 × £250) = £59,000
• Max loan = £59,000 × 4.5 = £265,500
• Max price = £265,500 + £52,500 deposit = £318,000

Source: MoneyHelper, How much can I borrow for a mortgage?

EU Income Multiples

There is no single EU-wide affordability rule. Individual country regulators set their own macroprudential limits:

• Ireland: Central Bank caps LTI at 3.5× for primary dwellings (exceptions allowed up to ~20% of loans).
• Netherlands: income-to-payment affordability norms set by NIBUD, typically equating to 4–5× for average earners.
• France, Germany, Spain: lenders apply a DSTI (debt-service-to-income) cap, typically 33–35%, more like the US model.

The EU setting in this calculator uses the same income-multiple formula as UK as a rough proxy. Adjust the multiple to reflect your target country's norms or the advice of a local broker.

Formula and How It's Calculated

US: Inverting the payment formula

The standard monthly payment formula is:

$$\text{payment}=P\cdot \frac{i}{1-(1+i{)}^{-n}}$$

where P is the loan principal, i = \text{rate}/100/12 is the monthly rate, and n = \text{years} \times 12.

Rearranging to solve for P:

$$P=\text{payment}\cdot \frac{1-(1+i{)}^{-n}}{i}$$

When i = 0 (zero rate): P = \text{payment} \times n.

The maximum payment is min(0.28 \times \text{grossMonthly},\, \max(0, 0.36 \times \text{grossMonthly} - \text{monthlyDebts})), and P from that payment is the maximum loan.

UK/EU: Income multiple

$$\text{maxLoan}=\max \left(0,(\text{annualIncome}-12\times \text{monthlyDebts})\times \text{multiple}\right)$$ $$\text{maxPrice}=\text{maxLoan}+\text{deposit}$$

The multiple defaults to 4.5 (UK conventional) but can be set from 3× to 5.5×.

Assumptions

• Income is gross (pre-tax) in both models; lenders assess DTI and income multiples against gross, not net, income.
• Monthly debts do not include estimated costs of the new mortgage (that is the variable being solved for).
• US DTI limits follow conventional lending guidelines (28/36). FHA loans permit higher limits (31/43); VA/USDA have even more flexibility. This calculator uses the conventional standard.
• UK multiple is a lender-level guideline, not a hard statutory cap for all lenders. Your actual offer may differ.
• Interest rate and term (US only) affect the loan amount for a given payment: a lower rate or longer term means a larger loan from the same payment.

Frequently Asked Questions

What counts as monthly debts? Car finance, student loans, personal loans, and credit card minimum payments. Not utilities, rent, or subscriptions. Not the new mortgage.

Should I use one income or two? If buying jointly, use the combined gross income of all applicants. Most lenders assess joint applications on combined income.

My lender offered less than this calculator shows. Why? This calculator applies headline rules. Lenders also consider credit score, employment type (employed vs self-employed), loan-to-value, property type, and internal risk appetite. The calculator shows a ceiling, not a guarantee.

What is a "good" DTI for the US? Below 36% back-end is considered conventional. FHA loans allow up to 43%. Below 28% front-end is generally comfortable. The lower your DTI, the more mortgage products are available to you.

Why does adding more monthly debt reduce my max price? For US: higher existing debts eat into your 36% back-end limit, reducing the portion available for the mortgage. For UK/EU: the calculator annualises debts and subtracts them from income before applying the multiple, because a lender knows that income already committed to other debt is not available for a mortgage.

Disclaimer

This calculator provides estimates based on commonly used lending guidelines. It does not account for lender-specific criteria, credit underwriting, stress tests, or changes in interest rates. The results are not a mortgage offer, pre-approval, or guarantee of lending. Consult a qualified mortgage adviser or broker for personalised guidance.