Real estate & rental
Real Estate Home Affordability Calculator
What price a lender is likely to approve, based on income, debts and the ratios they actually use.
Result
An arithmetic tool, not financial or legal advice. Lending criteria, tax treatment and tenancy law all vary by state and change regularly. Confirm anything that affects a decision with a lender, an accountant or an attorney. What a lender will approve and what is comfortable are different questions. These ratios are conventional guidelines that vary by loan programme and credit profile, and they take no account of childcare, medical costs, retirement saving or the maintenance a house needs. Borrowing the maximum approved is rarely wise.
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About this calculator
What are the 28/36 ratios?
Housing costs no more than 28% of gross monthly income, and all debt payments no more than 36%. They are conventional guidelines rather than hard rules, and many programmes allow higher.
Should I borrow the maximum?
Generally no. Approval limits are based on gross income and known debts only, and ignore everything else a household actually spends money on.
The formula
maximum payment is the lower of the housing ratio and the total debt ratio, then solved back to a price
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