Finance & Tax

Mortgage Affordability Calculator

Work out how much house you can afford using the same debt-to-income rule lenders apply. Enter your income, existing debts and deposit to see your maximum purchase price, loan size and monthly housing budget — under conventional, FHA or VA standards.

Your finances

Gross annual income$120,000.00

Use the total household income before tax — lenders count all borrowers.

Other monthly debt payments$650.00

Car loans, student loans, minimum card payments and child support.

Down payment$60,000.00

20% avoids private mortgage insurance on a conventional loan.

Interest rate6.500%

The APR quoted on a 30-year fixed conventional loan.

Loan term

Monthly tax, insurance & HOA$520.00

Escrowed costs count toward the housing ratio but do not repay principal.

Lending standard

CFPB Ability-to-Repay guideline; Fannie Mae/Freddie Mac 28/36 rule

Maximum home price: $420,720.67
Maximum loan: $360,720.67
Housing budget: $2,800.00
Back-end DTI: 34.5%

How your monthly income is allocated

Housing, escrow and existing debts at the maximum affordable price.

$10,000.00Monthly income

Principal & interest
Tax, insurance & HOA
Other monthly debts
Remaining income

How your monthly income is allocated
Category	Value
Principal & interest	$2,280.00
Tax, insurance & HOA	$520.00
Other monthly debts	$650.00
Remaining income	$6,550.00

Debt-to-income ratios

Front-end 28.0% · back-end 34.5% against the Conventional (28/36) limits.

34.5%36% limit

Debt-to-income ratios
Category	Value
Current	34.5%
Maximum	60.0%

Income required at each home price

Gross annual income needed to stay within the 28% front-end ratio.

$250,000.00
$400,000.00
$550,000.00
$700,000.00
$850,000.00

Income required at each home price
Category	Value
$250,000.00	$73,754.11
$400,000.00	$114,387.05
$550,000.00	$155,020.00
$700,000.00	$195,652.94
$850,000.00	$236,285.89

Loan balance vs equity on the maximum purchase

Principal falls while your equity in the home rises.

Loan balance
Home equity

Loan balance vs equity on the maximum purchase
Category	Value
Y1	Loan balance: $360,394.57 · Home equity: $60,326.10
Y2	Loan balance: $355,285.71 · Home equity: $65,434.96
Y3	Loan balance: $349,745.63 · Home equity: $70,975.04
Y4	Loan balance: $343,737.97 · Home equity: $76,982.70
Y6	Loan balance: $337,223.22 · Home equity: $83,497.45
Y7	Loan balance: $330,158.59 · Home equity: $90,562.08
Y8	Loan balance: $322,497.69 · Home equity: $98,222.98
Y9	Loan balance: $314,190.18 · Home equity: $106,530.49
Y11	Loan balance: $305,181.46 · Home equity: $115,539.21
Y12	Loan balance: $295,412.38 · Home equity: $125,308.29
Y13	Loan balance: $284,818.75 · Home equity: $135,901.92
Y14	Loan balance: $273,330.95 · Home equity: $147,389.72
Y16	Loan balance: $260,873.55 · Home equity: $159,847.12
Y17	Loan balance: $247,364.69 · Home equity: $173,355.98
Y18	Loan balance: $232,715.63 · Home equity: $188,005.04
Y19	Loan balance: $216,830.12 · Home equity: $203,890.55
Y21	Loan balance: $199,603.81 · Home equity: $221,116.86
Y22	Loan balance: $180,923.52 · Home equity: $239,797.15
Y23	Loan balance: $160,666.54 · Home equity: $260,054.13
Y24	Loan balance: $138,699.80 · Home equity: $282,020.87
Y26	Loan balance: $114,878.97 · Home equity: $305,841.70
Y27	Loan balance: $89,047.55 · Home equity: $331,673.12
Y28	Loan balance: $61,035.83 · Home equity: $359,684.84
Y29	Loan balance: $30,659.82 · Home equity: $390,060.85

Gross monthly income: $10,000.00
Front-end cap (28%): $2,800.00
Back-end cap (36%): $2,950.00
Binding housing budget: $2,800.00
Principal & interest: $2,280.00
Maximum loan amount: $360,720.67
Maximum home price: $420,720.67
Down payment share: 14.3%

The front-end ratio is doing the limiting

Your front-end ratio is 28.0% and your back-end ratio is 34.5%. Under the Conventional (28/36) standard the front-end ratio caps the housing budget at $2,800.00 a month. Paying down $650.00 of other debt would raise the back-end cap and could unlock a larger loan.

Amortization schedule

360 payments · 360 rows

#	Interest	Principal	Extra	Balance
1	$1,954	$326	—	$360,395
2	$1,952	$328	—	$360,067
3	$1,950	$330	—	$359,737
4	$1,949	$331	—	$359,406
5	$1,947	$333	—	$359,072
6	$1,945	$335	—	$358,737
7	$1,943	$337	—	$358,401
8	$1,941	$339	—	$358,062
9	$1,940	$341	—	$357,721
10	$1,938	$342	—	$357,379
11	$1,936	$344	—	$357,035
12	$1,934	$346	—	$356,689
13	$1,932	$348	—	$356,341
14	$1,930	$350	—	$355,991
15	$1,928	$352	—	$355,639
16	$1,926	$354	—	$355,286
17	$1,924	$356	—	$354,930
18	$1,923	$357	—	$354,573
19	$1,921	$359	—	$354,213
20	$1,919	$361	—	$353,852
21	$1,917	$363	—	$353,489
22	$1,915	$365	—	$353,123
23	$1,913	$367	—	$352,756
24	$1,911	$369	—	$352,387
25	$1,909	$371	—	$352,016
26	$1,907	$373	—	$351,642
27	$1,905	$375	—	$351,267
28	$1,903	$377	—	$350,890
29	$1,901	$379	—	$350,511
30	$1,899	$381	—	$350,129
31	$1,897	$383	—	$349,746
32	$1,894	$386	—	$349,360
33	$1,892	$388	—	$348,972
34	$1,890	$390	—	$348,583
35	$1,888	$392	—	$348,191
36	$1,886	$394	—	$347,797
37	$1,884	$396	—	$347,401
38	$1,882	$398	—	$347,003
39	$1,880	$400	—	$346,602
40	$1,877	$403	—	$346,200
41	$1,875	$405	—	$345,795
42	$1,873	$407	—	$345,388
43	$1,871	$409	—	$344,979
44	$1,869	$411	—	$344,567
45	$1,866	$414	—	$344,154
46	$1,864	$416	—	$343,738
47	$1,862	$418	—	$343,320
48	$1,860	$420	—	$342,900
49	$1,857	$423	—	$342,477
50	$1,855	$425	—	$342,052
51	$1,853	$427	—	$341,625
52	$1,850	$430	—	$341,195
53	$1,848	$432	—	$340,763
54	$1,846	$434	—	$340,329
55	$1,843	$437	—	$339,893
56	$1,841	$439	—	$339,454
57	$1,839	$441	—	$339,012
58	$1,836	$444	—	$338,569
59	$1,834	$446	—	$338,123
60	$1,832	$449	—	$337,674
61	$1,829	$451	—	$337,223
62	$1,827	$453	—	$336,770
63	$1,824	$456	—	$336,314
64	$1,822	$458	—	$335,856
65	$1,819	$461	—	$335,395
66	$1,817	$463	—	$334,932
67	$1,814	$466	—	$334,466
68	$1,812	$468	—	$333,998
69	$1,809	$471	—	$333,527
70	$1,807	$473	—	$333,053
71	$1,804	$476	—	$332,577
72	$1,801	$479	—	$332,099
73	$1,799	$481	—	$331,618
74	$1,796	$484	—	$331,134
75	$1,794	$486	—	$330,648
76	$1,791	$489	—	$330,159
77	$1,788	$492	—	$329,667
78	$1,786	$494	—	$329,173
79	$1,783	$497	—	$328,676
80	$1,780	$500	—	$328,176
81	$1,778	$502	—	$327,674
82	$1,775	$505	—	$327,169
83	$1,772	$508	—	$326,661
84	$1,769	$511	—	$326,150
85	$1,767	$513	—	$325,637
86	$1,764	$516	—	$325,121
87	$1,761	$519	—	$324,602
88	$1,758	$522	—	$324,080
89	$1,755	$525	—	$323,555
90	$1,753	$527	—	$323,028
91	$1,750	$530	—	$322,498
92	$1,747	$533	—	$321,965
93	$1,744	$536	—	$321,429
94	$1,741	$539	—	$320,890
95	$1,738	$542	—	$320,348
96	$1,735	$545	—	$319,803
97	$1,732	$548	—	$319,255
98	$1,729	$551	—	$318,705
99	$1,726	$554	—	$318,151
100	$1,723	$557	—	$317,594
101	$1,720	$560	—	$317,034
102	$1,717	$563	—	$316,472
103	$1,714	$566	—	$315,906
104	$1,711	$569	—	$315,337
105	$1,708	$572	—	$314,765
106	$1,705	$575	—	$314,190
107	$1,702	$578	—	$313,612
108	$1,699	$581	—	$313,031
109	$1,696	$584	—	$312,446
110	$1,692	$588	—	$311,859
111	$1,689	$591	—	$311,268
112	$1,686	$594	—	$310,674
113	$1,683	$597	—	$310,077
114	$1,680	$600	—	$309,476
115	$1,676	$604	—	$308,873
116	$1,673	$607	—	$308,266
117	$1,670	$610	—	$307,656
118	$1,666	$614	—	$307,042
119	$1,663	$617	—	$306,425
120	$1,660	$620	—	$305,805
121	$1,656	$624	—	$305,181
122	$1,653	$627	—	$304,555
123	$1,650	$630	—	$303,924
124	$1,646	$634	—	$303,290
125	$1,643	$637	—	$302,653
126	$1,639	$641	—	$302,013
127	$1,636	$644	—	$301,369
128	$1,632	$648	—	$300,721
129	$1,629	$651	—	$300,070
130	$1,625	$655	—	$299,415
131	$1,622	$658	—	$298,757
132	$1,618	$662	—	$298,095
133	$1,615	$665	—	$297,430
134	$1,611	$669	—	$296,761
135	$1,607	$673	—	$296,089
136	$1,604	$676	—	$295,412
137	$1,600	$680	—	$294,733
138	$1,596	$684	—	$294,049
139	$1,593	$687	—	$293,362
140	$1,589	$691	—	$292,671
141	$1,585	$695	—	$291,976
142	$1,582	$698	—	$291,278
143	$1,578	$702	—	$290,575
144	$1,574	$706	—	$289,869
145	$1,570	$710	—	$289,159
146	$1,566	$714	—	$288,446
147	$1,562	$718	—	$287,728
148	$1,559	$721	—	$287,007
149	$1,555	$725	—	$286,281
150	$1,551	$729	—	$285,552
151	$1,547	$733	—	$284,819
152	$1,543	$737	—	$284,082
153	$1,539	$741	—	$283,340
154	$1,535	$745	—	$282,595
155	$1,531	$749	—	$281,846
156	$1,527	$753	—	$281,092
157	$1,523	$757	—	$280,335
158	$1,518	$762	—	$279,573
159	$1,514	$766	—	$278,808
160	$1,510	$770	—	$278,038
161	$1,506	$774	—	$277,264
162	$1,502	$778	—	$276,486
163	$1,498	$782	—	$275,704
164	$1,493	$787	—	$274,917
165	$1,489	$791	—	$274,126
166	$1,485	$795	—	$273,331
167	$1,481	$799	—	$272,531
168	$1,476	$804	—	$271,728
169	$1,472	$808	—	$270,920
170	$1,467	$813	—	$270,107
171	$1,463	$817	—	$269,290
172	$1,459	$821	—	$268,469
173	$1,454	$826	—	$267,643
174	$1,450	$830	—	$266,813
175	$1,445	$835	—	$265,978
176	$1,441	$839	—	$265,139
177	$1,436	$844	—	$264,295
178	$1,432	$848	—	$263,446
179	$1,427	$853	—	$262,593
180	$1,422	$858	—	$261,736
181	$1,418	$862	—	$260,874
182	$1,413	$867	—	$260,007
183	$1,408	$872	—	$259,135
184	$1,404	$876	—	$258,259
185	$1,399	$881	—	$257,378
186	$1,394	$886	—	$256,492
187	$1,389	$891	—	$255,601
188	$1,385	$895	—	$254,706
189	$1,380	$900	—	$253,805
190	$1,375	$905	—	$252,900
191	$1,370	$910	—	$251,990
192	$1,365	$915	—	$251,075
193	$1,360	$920	—	$250,155
194	$1,355	$925	—	$249,230
195	$1,350	$930	—	$248,300
196	$1,345	$935	—	$247,365
197	$1,340	$940	—	$246,425
198	$1,335	$945	—	$245,479
199	$1,330	$950	—	$244,529
200	$1,325	$955	—	$243,574
201	$1,319	$961	—	$242,613
202	$1,314	$966	—	$241,647
203	$1,309	$971	—	$240,676
204	$1,304	$976	—	$239,700
205	$1,298	$982	—	$238,718
206	$1,293	$987	—	$237,731
207	$1,288	$992	—	$236,739
208	$1,282	$998	—	$235,741
209	$1,277	$1,003	—	$234,738
210	$1,272	$1,009	—	$233,730
211	$1,266	$1,014	—	$232,716
212	$1,261	$1,019	—	$231,696
213	$1,255	$1,025	—	$230,671
214	$1,249	$1,031	—	$229,641
215	$1,244	$1,036	—	$228,605
216	$1,238	$1,042	—	$227,563
217	$1,233	$1,047	—	$226,515
218	$1,227	$1,053	—	$225,462
219	$1,221	$1,059	—	$224,404
220	$1,216	$1,064	—	$223,339
221	$1,210	$1,070	—	$222,269
222	$1,204	$1,076	—	$221,193
223	$1,198	$1,082	—	$220,111
224	$1,192	$1,088	—	$219,023
225	$1,186	$1,094	—	$217,930
226	$1,180	$1,100	—	$216,830
227	$1,175	$1,106	—	$215,725
228	$1,169	$1,111	—	$214,613
229	$1,162	$1,118	—	$213,496
230	$1,156	$1,124	—	$212,372
231	$1,150	$1,130	—	$211,242
232	$1,144	$1,136	—	$210,107
233	$1,138	$1,142	—	$208,965
234	$1,132	$1,148	—	$207,817
235	$1,126	$1,154	—	$206,662
236	$1,119	$1,161	—	$205,502
237	$1,113	$1,167	—	$204,335
238	$1,107	$1,173	—	$203,162
239	$1,100	$1,180	—	$201,982
240	$1,094	$1,186	—	$200,796
241	$1,088	$1,192	—	$199,604
242	$1,081	$1,199	—	$198,405
243	$1,075	$1,205	—	$197,200
244	$1,068	$1,212	—	$195,988
245	$1,062	$1,218	—	$194,769
246	$1,055	$1,225	—	$193,544
247	$1,048	$1,232	—	$192,313
248	$1,042	$1,238	—	$191,075
249	$1,035	$1,245	—	$189,830
250	$1,028	$1,252	—	$188,578
251	$1,021	$1,259	—	$187,319
252	$1,015	$1,265	—	$186,054
253	$1,008	$1,272	—	$184,782
254	$1,001	$1,279	—	$183,503
255	$994	$1,286	—	$182,217
256	$987	$1,293	—	$180,924
257	$980	$1,300	—	$179,624
258	$973	$1,307	—	$178,316
259	$966	$1,314	—	$177,002
260	$959	$1,321	—	$175,681
261	$952	$1,328	—	$174,353
262	$944	$1,336	—	$173,017
263	$937	$1,343	—	$171,674
264	$930	$1,350	—	$170,324
265	$923	$1,357	—	$168,967
266	$915	$1,365	—	$167,602
267	$908	$1,372	—	$166,230
268	$900	$1,380	—	$164,850
269	$893	$1,387	—	$163,463
270	$885	$1,395	—	$162,069
271	$878	$1,402	—	$160,667
272	$870	$1,410	—	$159,257
273	$863	$1,417	—	$157,839
274	$855	$1,425	—	$156,414
275	$847	$1,433	—	$154,982
276	$839	$1,441	—	$153,541
277	$832	$1,448	—	$152,093
278	$824	$1,456	—	$150,637
279	$816	$1,464	—	$149,173
280	$808	$1,472	—	$147,701
281	$800	$1,480	—	$146,221
282	$792	$1,488	—	$144,733
283	$784	$1,496	—	$143,237
284	$776	$1,504	—	$141,733
285	$768	$1,512	—	$140,220
286	$760	$1,520	—	$138,700
287	$751	$1,529	—	$137,171
288	$743	$1,537	—	$135,634
289	$735	$1,545	—	$134,089
290	$726	$1,554	—	$132,535
291	$718	$1,562	—	$130,973
292	$709	$1,571	—	$129,402
293	$701	$1,579	—	$127,823
294	$692	$1,588	—	$126,236
295	$684	$1,596	—	$124,640
296	$675	$1,605	—	$123,035
297	$666	$1,614	—	$121,421
298	$658	$1,622	—	$119,799
299	$649	$1,631	—	$118,168
300	$640	$1,640	—	$116,528
301	$631	$1,649	—	$114,879
302	$622	$1,658	—	$113,221
303	$613	$1,667	—	$111,555
304	$604	$1,676	—	$109,879
305	$595	$1,685	—	$108,194
306	$586	$1,694	—	$106,500
307	$577	$1,703	—	$104,797
308	$568	$1,712	—	$103,085
309	$558	$1,722	—	$101,363
310	$549	$1,731	—	$99,632
311	$540	$1,740	—	$97,892
312	$530	$1,750	—	$96,142
313	$521	$1,759	—	$94,383
314	$511	$1,769	—	$92,614
315	$502	$1,778	—	$90,836
316	$492	$1,788	—	$89,048
317	$482	$1,798	—	$87,250
318	$473	$1,807	—	$85,442
319	$463	$1,817	—	$83,625
320	$453	$1,827	—	$81,798
321	$443	$1,837	—	$79,961
322	$433	$1,847	—	$78,114
323	$423	$1,857	—	$76,258
324	$413	$1,867	—	$74,391
325	$403	$1,877	—	$72,514
326	$393	$1,887	—	$70,626
327	$383	$1,897	—	$68,729
328	$372	$1,908	—	$66,821
329	$362	$1,918	—	$64,903
330	$352	$1,928	—	$62,975
331	$341	$1,939	—	$61,036
332	$331	$1,949	—	$59,086
333	$320	$1,960	—	$57,126
334	$309	$1,971	—	$55,156
335	$299	$1,981	—	$53,175
336	$288	$1,992	—	$51,183
337	$277	$2,003	—	$49,180
338	$266	$2,014	—	$47,166
339	$255	$2,025	—	$45,142
340	$245	$2,035	—	$43,106
341	$233	$2,047	—	$41,060
342	$222	$2,058	—	$39,002
343	$211	$2,069	—	$36,934
344	$200	$2,080	—	$34,854
345	$189	$2,091	—	$32,762
346	$177	$2,103	—	$30,660
347	$166	$2,114	—	$28,546
348	$155	$2,125	—	$26,421
349	$143	$2,137	—	$24,284
350	$132	$2,148	—	$22,135
351	$120	$2,160	—	$19,975
352	$108	$2,172	—	$17,803
353	$96	$2,184	—	$15,620
354	$85	$2,195	—	$13,424
355	$73	$2,207	—	$11,217
356	$61	$2,219	—	$8,998
357	$49	$2,231	—	$6,767
358	$37	$2,243	—	$4,523
359	$25	$2,256	—	$2,268
360	$12	$2,268	—	$0

This calculator is provided for general information only and is not financial advice or a lending commitment. Lenders also weigh credit score, employment history, reserves and the property appraisal, so the maximum price shown here is an estimate. DTI limits vary by programme and by lender overlay.

How mortgage affordability is calculated

Lenders do not start with the price of the house. They start with your income, subtract the debts you already carry, and work backwards to the largest monthly payment you can sustain. That payment is then converted into a loan amount using the standard amortising payment formula, and your deposit is added on top to give the maximum purchase price.

Step 1 — Apply the front-end and back-end caps

The front-end ratio limits housing costs as a share of gross monthly income. The back-end ratio limits housing plus all other debt. The lower of the two caps is the one that binds.

frontEndCap  = grossMonthlyIncome × frontEndDTI
backEndCap   = grossMonthlyIncome × backEndDTI − monthlyDebts
housingBudget = min(frontEndCap, backEndCap)

Step 2 — Strip out escrow to find the loan payment

Property tax, homeowners insurance, private mortgage insurance and HOA dues are part of the housing payment but they do not repay principal. Subtract them from the housing budget to find the amount available for principal and interest.

availableForLoan = housingBudget − monthlyEscrow

Step 3 — Invert the amortising payment formula

The Reg. Z Appendix J payment formula is rearranged to solve for the present value — the loan amount that a given payment can service.

M = P × [ i(1 + i)^n ] ÷ [ (1 + i)^n − 1 ]

P = M × [ (1 + i)^n − 1 ] ÷ [ i(1 + i)^n ]

where i = annualRate ÷ 12 and n = term in months

Step 4 — Add the down payment

maxHomePrice = maxLoanAmount + downPayment

Worked example — a $120,000 US household

Take a gross salary of $120,000, which is $10,000 a month. Existing car and card payments total $650 a month, the deposit is $60,000, the rate is 6.5% over 30 years and escrow is $520 a month.

Front-end cap: $10,000 × 28% = $2,800
Back-end cap: $10,000 × 36% − $650 = $2,950
Binding housing budget: $2,800 (front-end)
Available for principal and interest: $2,800 − $520 = $2,280
Maximum loan at 6.5% over 360 months: $360,721
Maximum purchase price: $360,721 + $60,000 = $420,721

The resulting ratios are 28.0% front-end and 34.5% back-end, both inside the conventional limits. Notice that the front-end cap binds here — the $650 of other debt is not large enough to trigger the back-end constraint.

Worked example — when the back-end ratio binds

Now raise the other monthly debt to $1,400. The back-end cap becomes $10,000 × 36% − $1,400 = $2,200, which is below the $2,800 front-end cap. The housing budget falls to $2,200, leaving $1,680 for principal and interest, which supports a loan of about $265,794 and a purchase price of roughly $325,794. Clearing $750 of that debt would restore the full front-end budget — a far bigger gain than shopping for a lower rate.

Worked example — a UK borrower

A UK household earning £75,000 with a £25,000 deposit, no unsecured debt and a 5.0% rate over 25 years would typically be assessed on an income multiple of about 4.5×, giving a maximum loan near £337,500 and a purchase price near £362,500. UK lenders must also stress-test affordability under FCA MCOB 11, so the figure a lender will actually offer is often lower than a simple multiple suggests.

How to use this calculator

Enter your gross annual household income before tax, including every borrower on the application.
Add your other monthly debt payments — car loans, student loans, minimum card payments and child support.
Set your down payment. Aim for 20% to avoid private mortgage insurance on a conventional loan.
Choose a rate and term. A 30-year term lowers the payment and raises the affordable price; a 15-year term does the opposite.
Enter the monthly escrow for property tax, insurance and HOA dues.
Pick a lending standard — conventional 28/36, FHA 31/43, VA 41/56 or a conservative 25/33 buffer.
Read the maximum home price and check which ratio is binding. Paying down debt or saving more deposit moves the number fastest.

What this calculator does not include

Lenders also weigh credit score, employment history, cash reserves, the property appraisal and any lender-specific overlays. A high credit score can push the approved DTI above the guideline, while a thin credit file can pull it below. Treat the maximum price shown here as a well-founded starting point for a conversation with a mortgage adviser, not as a lending decision.

FAQ

Frequently asked questions

Still unsure about something? Our contact page reaches a real person, usually within two business days.

How much house can I afford on a $120,000 salary?

On a $120,000 gross salary the monthly income is $10,000. The conventional 28/36 rule caps housing at 28% — $2,800 a month — and total debt at 36% — $3,600 a month. With $650 of existing car and card payments the back-end cap leaves $2,950 for housing, so the front-end figure of $2,800 binds. After $520 of tax and insurance escrow, $2,280 services the loan, which at 6.5% over 30 years supports a $360,721 mortgage. Add a $60,000 down payment and the maximum purchase price is about $420,721.

What is the 28/36 rule?

The 28/36 rule is the conventional underwriting guideline that a household should spend no more than 28% of gross monthly income on housing costs and no more than 36% on all debt combined. Housing costs include principal, interest, property tax, homeowners insurance, PMI and HOA dues. The 36% back-end figure adds car loans, student loans, minimum credit card payments and child support. Lenders apply the lower of the two caps, which is why a large car payment can shrink your budget even when your income is high.

What debt-to-income ratio do FHA and VA loans allow?

FHA loans are typically underwritten to 31% front-end and 43% back-end, and automated underwriting can approve up to 50% back-end with compensating factors such as reserves or a strong credit score. VA loans use a 41% back-end guideline but VA lenders commonly approve well above that because the VA's residual income test replaces a hard DTI ceiling. Both programmes are more permissive than the conventional 28/36 rule, but a higher ratio means less financial cushion if rates rise or income falls.

Does a bigger down payment increase how much I can borrow?

A bigger down payment increases the price you can pay, but it does not increase the loan you can service. The loan size is set by your income and debts; the down payment is added on top. Putting down 20% instead of 5% does not raise your maximum mortgage, but it does remove private mortgage insurance, which lowers the escrow portion of your housing payment and therefore frees up room for a slightly larger loan. It also improves your loan-to-value ratio, which can unlock a better rate.

Should I use the front-end or back-end ratio to budget?

Use whichever is lower — that is the binding constraint. If you have little non-housing debt the front-end 28% cap usually binds. If you carry car loans, student loans or card balances the back-end cap often binds first, and paying those down raises your budget more than shopping for a lower rate. The calculator shows which ratio is limiting you and by how much, so you can decide whether to save a larger deposit or clear a debt before applying.

How do UK and EU lenders assess affordability differently?

UK lenders must follow FCA MCOB 11 rules, which require a stressed affordability test: the loan must remain affordable if rates rise by a stress margin, and lenders also apply an income multiple — commonly around 4.5 times gross salary — plus a detailed assessment of committed expenditure. EU lenders work under the Mortgage Credit Directive 2014/17/EU, which mandates a creditworthiness assessment and an annual percentage rate of charge disclosure. Neither uses the US 28/36 rule directly, so treat the DTI output here as a US-market benchmark and check the lender's own affordability model.