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Home affordability calculator: How much mortgage can I borrow?

Mortgage how much can I borrow calculator helps you determine the maximum loan amount that you can borrow. Also, you'll be able to calculate the maximum monthly mortgage payment. Only you have to put your monthly income, debt payments, annual housing expenses and the mortgage loan period and the term in order to find out the amount that you can afford to borrow.

Monthly Income
Other Income
Annual Housing Expenses
Property Taxes
Hazard Insurance
Other Monthly Debt
Auto Loan
Credit Cards and Other Debts
Loan Period (Years)
Mortgage Rate
Mortgage: How much can I borrow?
Monthly Payment
(Monthly Principal + Interest)
Maximum Loan Amount

How much mortgage can I borrow - Affordability factors

"Mortgage calculators how much can I borrow" help you figure out the maximum amount that you can borrow. However, the maximum borrowing amount depends upon the affordability factors that lenders look into. Such factors are:
  • Monthly gross income: This includes your total monthly income including wages (if employed) and investment income prior to taxes and deductions. Any additional income (due to overtime, bonus, part time jobs, rental income, etc) is also taken into account.

    If you're self-employed, the loan amount will depend upon your net taxable income based on 2 years of business accounts. Lenders prefer you to have at least 2 years of business accounts in order to qualify for a mortgage.

  • Annual Housing Expenses: This includes your annual property tax and home/hazard insurance premium. Property taxes are levied as a percentage of your assessed property value. Home/hazard insurance is what your lender requires you to purchase in order to keep your home protected from disasters like flood, hurricanes etc.
  • Monthly debt obligations: These include your monthly payments towards credit cards, personal loans, auto loans and other debts. Lenders check 2 ratios - housing ratio and debt to income ratio which help to determine the maximum borrowing amount.

A real life scenario - How much can I borrow for a mortgage?

For example, suppose your total monthly income from all sources is $20,000. Let, your total annual housing expenses and other monthly debts be $500 and $200 respectively. Now, say the mortgage rate is 4% and you want to take out a mortgage loan with a term period of 15 years.

Then the maximum loan amount that you can borrow will be $751398 and your monthly mortgage payment will be $5558.

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