Last updated 3 September 2026
The 28% / 36% rule
Lenders commonly cap housing costs at 28% of gross monthly income (the front-end ratio), and total debt payments — housing plus everything else — at 36% (the back-end ratio). This calculator works out both limits and uses whichever is smaller, since that's the one that actually constrains the loan a lender would approve.
From that maximum monthly payment, the calculator works backward through the standard loan formula to find the largest loan that payment could support, then adds the down payment to get an estimated affordable home price.
The costs that are not the mortgage
Affordability calculations focus on the loan payment, but ownership carries running costs that rent does not. Property tax, buildings insurance, maintenance, and service charges or association fees where they apply all continue for as long as you own the property. A common planning figure for maintenance alone is around 1% of the property's value each year, averaged over time — some years nothing, and then a roof.
The purchase itself has costs beyond the deposit as well: legal fees, survey, transfer or stamp duty, and moving. These typically run to several per cent of the purchase price and are paid in cash rather than borrowed, so a deposit calculation that ignores them overstates what you can actually afford to buy.
Assumptions and limitations
What the maths does. It applies the US 28/36 guideline: housing costs capped at 28% of gross monthly income, and total debt payments including the mortgage capped at 36%, with your existing debt payments subtracted from the second figure. The lower of the two results sets the affordable payment, which is then worked back into a price.
28/36 is a country-specific rule of thumb. It is a conventional US underwriting guideline, not a law and not a global standard. UK lenders work primarily from an income multiple and a stressed affordability assessment; other countries use debt-service-to-income caps set by the central bank, or different ratios entirely. Individual lenders also vary widely, and many will lend more or less than 28/36 suggests.
Gross income is a blunt input. The ratios use income before tax, so two people with the same gross income but different tax positions, pension contributions or dependants get the same answer despite having very different amounts left each month. Your own budget is a better test than either ratio.
What is not included. Closing and legal costs, stamp duty or transfer tax, moving costs, maintenance, service charges, and the running cost of the home itself.
Assumptions that apply to every finance calculator here
Currency is a display choice only. Changing the currency symbol relabels the output; it does not convert anything and no exchange rate is used anywhere in this tool.
Tax and lending rules vary by country. Nothing here is adjusted for the rules where you live — income tax, capital gains tax, stamp duty, lending caps, affordability tests and consumer-credit regulation all differ, and several of them can change the real answer materially.
Rates and returns are not guaranteed. Any rate you enter is treated as fixed for the whole period. Real interest rates move, real investment returns vary year to year and can be negative, and past performance does not predict future results.
This is an estimate, not advice. The result is arithmetic on the numbers you typed. It is not an offer, a quote, an approval, an investment recommendation or financial advice. Before committing to anything, get figures from the actual lender, provider or a qualified adviser in your country.
Common questions
What are the 28% and 36% rules?
Standard lending guidelines: housing costs shouldn't exceed 28% of gross monthly income (the front-end ratio), and total debt payments including housing shouldn't exceed 36% (the back-end ratio). Lenders use both and apply whichever is more restrictive.
Why does existing debt reduce how much home I can afford?
The 36% back-end limit covers all debt, not just housing. A car loan or student loan payment eats into that 36%, leaving less room for a mortgage payment even if income alone would support a bigger one.
Is this the same number a lender will approve?
It's a reasonable estimate using the guidelines most lenders reference, but actual approval depends on credit score, employment history and the specific lender's own criteria — treat this as a planning starting point, not a pre-approval.