Calculate home affordability

Estimate a mortgage ceiling from household income, existing monthly debts, deposit, interest rate, and term.

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ToolHome Affordability Calculator
Input
Output
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How it works

One limit multiplies annual income by the chosen income multiple, while another converts the allowed monthly payment after debts into an amortising loan. The lower limit becomes estimated borrowing and the deposit is added for property price; 4.5 times income and 35% of gross monthly income are editable screening assumptions, not lender approval.

Formula
estimated loan = min(income ceiling, payment-supported loan)
property price = estimated loan + deposit
  • At zero interest the payment-based limit is payment multiplied by the number of months.
  • The displayed payment is recalculated for whichever borrowing ceiling is lower.

Worked example

Sixty thousand income, thirty thousand deposit
A 5% rate over 30 years
Input
											Annual income: 60000
Deposit: 30000
Rate percent: 5
Term years: 30
Output
												Max loan by income multiple: 270000
Max loan by payment: 325992.83
Max loan: 270000
Max property price: 300000
Monthly payment: 1449.42
Assumed income multiple: 4.5
Assumed max affordability percent: 35

When to use this

Agreement-in-principle preparation, mortgage broker fact-finds, and house-search budgets compare household income with debts and stressed repayment capacity.

Edge cases

  • If existing debts consume the complete payment allowance, processing stops because no mortgage payment remains.
  • At 0% interest, supported loan is monthly payment multiplied by term months instead of using the amortisation denominator.
  • The estimate uses the lower of the income-multiple and payment-based limits, so a large deposit raises property price but not borrowing capacity.

References