Mortgage Affordability Calculator 2026

How Much Mortgage Can I Afford?

Mortgage affordability depends on your income, existing debts, and the lender's criteria. In the US, lenders use the debt-to-income (DTI) ratio — most conventional lenders allow a back-end DTI of up to 43%. In the UK, lenders typically offer 4 to 4.5 times your annual salary, with some offering up to 5.5x for higher earners.

US vs UK Mortgage Rules 2026

What Lenders Approve vs What You Can Actually Afford

These are two different numbers, and confusing them is the most expensive mistake in the whole process. A lender's maximum is calculated from your gross income before tax, before retirement contributions, and before childcare, commuting or the higher bills that come with a bigger home. The 36/43 and 4.5x figures above are what an underwriter will sign off — not a budget that leaves you comfortable.

The gap is easiest to see in take-home terms. On a $95,000 US salary, gross monthly income is about $7,900, so a 36% housing ratio permits roughly $2,850 a month. But take-home after federal tax, FICA and state tax is closer to $5,800 — meaning that "approved" payment is nearly half of the money that actually reaches your account, before a single utility bill. Underwriters do not see that; they see the gross figure.

A useful discipline is to run the payment you are considering through a take-home calculation first and live on the remainder for two or three months before committing. If it is uncomfortable while renting, it will not become comfortable once maintenance and property tax arrive.

The Costs That Are Not in the Payment

Affordability calculators, including this one, size the mortgage itself. Ownership carries a second layer of cost that rent does not, and it is routinely underestimated:

• Property tax and insurance. In the US these are usually escrowed into the monthly payment, so the real cheque is meaningfully larger than the principal-and-interest figure.
• Mortgage insurance. Putting down less than 20% typically adds PMI in the US until you reach that equity level — a cost that buys you nothing and disappears once you cross it.
• Maintenance. A common planning rule is 1% of the property value a year. On a $350,000 home that is $3,500 annually, or roughly $290 a month that never appears on any approval letter.
• Buying costs. UK buyers face stamp duty on completion, which on a £350,000 home is £5,000 for a home mover and can be far more on an additional property. US closing costs commonly run 2–5% of the price.

Add these together and the sustainable purchase price is often 10–20% below the maximum a lender will offer. That is not pessimism — it is the difference between the loan being approved and the budget being livable.

Why the Same Salary Buys Very Different Homes

Two applicants on identical incomes routinely receive very different offers, because the inputs that move the number most are not income at all:

• Existing debt. In the US, monthly debt payments come straight off your borrowing capacity. A $400 car payment can reduce the mortgage you qualify for by roughly $60,000–$70,000 at typical rates — clearing it before applying is often worth more than a raise.
• The interest rate. Rates set how much payment converts into principal. The same monthly payment buys a substantially smaller loan at 8% than at 5%, which is why affordability shifts even when salaries do not.
• The term. Stretching from 25 to 30 or 35 years lowers the monthly payment and raises the maximum — while increasing total interest considerably. It buys approval, not value.
• The deposit. A larger deposit raises the purchase price directly and can unlock a better rate band, which raises it again.

Frequently Asked Questions