House Affordability Calculator
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Lending guidelines differ significantly between the US and the UK. Our calculator automatically adjusts its mathematical logic based on your selected region to provide a realistic estimate.
US Guidelines: The 28/36 Rule
In the US, lenders prioritize Debt-to-Income (DTI) ratios. Our logic applies two strict ceilings:
- The 28% Rule: Your total monthly housing payment (PITI - Principal, Interest, Taxes, and Insurance) should not exceed 28% of your gross monthly income.
- The 36% Rule: Your housing payment plus all other recurring monthly debts (car loans, student loans, credit cards) should not exceed 36% of your gross income.
Our calculator finds the maximum payment allowed under both rules and uses the more conservative figure to work backward to an affordable purchase price.
UK Guidelines: The Income Multiplier
UK lenders traditionally focus on your Gross Annual Income. While affordability checks also consider your outgoings, the primary constraint is a multiple of your salary.
UK Calculation Path:
Max Loan = (Gross Annual Salary × Multiplier [Default 4.5x])
Affordable Price = Max Loan + Cash Deposit
Lenders may offer anywhere from 4x to 5.5x depending on your credit profile, job stability, and whether you are a first-time buyer.
💡 Don't Forget "Sunk Costs"
While you might be able to borrow enough for a expensive home, remember to factor in property taxes, insurance, and maintenance. These costs are often referred to as "non-recoverable" because unlike your mortgage principal, you don't get this money back when you sell.