Maximum Affordable Property Calculator
Work out the maximum property price you can afford.
How this is calculated
Your max monthly payment is your income times the payment ratio. That payment is run through the standard loan-amortization formula (given your rate and term) to find the maximum loan you could service, then your deposit is added on top for the maximum property price. This mirrors how a lender actually assesses affordability — starting from what you can pay each month, not from a target property price — which is why it's a more realistic ceiling than a simple multiple of income.
Using this calculator's defaults — $8,000 monthly gross income, a 35% max payment ratio, a $50,000 deposit, 6.5% interest, and a 30-year term — the maximum monthly payment is $8,000 × 35% = $2,800. At 6.5% over 30 years, that payment services a loan of roughly $443,000, so adding the $50,000 deposit gives a maximum affordable property price of approximately $493,000. Once you have that figure, check the resulting payment schedule on the Mortgage calculator, compare it against a simpler price-to-income benchmark, and see how it holds up to rate rises on the Mortgage Stress Test calculator.
Frequently asked questions
- Why 35% of income by default?
- 35% of gross monthly income is a common lender affordability ceiling for the mortgage payment alone — you can adjust it if your lender or budget uses a different figure.
- Does this include property taxes or insurance?
- No — this is principal-and-interest only. Taxes, insurance, and HOA fees would reduce how much loan you can actually afford within the same payment budget.
- How is maximum affordable property calculated?
- Your maximum monthly payment is your gross monthly income multiplied by your chosen payment ratio. That payment amount is then run backwards through the standard loan amortisation formula, using your interest rate and term, to find the largest loan that payment could service. Adding your deposit on top gives the maximum property price.
- What debt-to-income ratio do lenders typically use?
- Lenders commonly cap the mortgage payment itself at around 28–35% of gross income, and total debt payments (mortgage plus other debts like car loans and credit cards) at around 36–43%. Exact limits vary by lender, loan type, and country.
- What is the impact of deposit size on the maximum property price?
- A larger deposit adds directly to the maximum property price on top of whatever loan your income can service — it does not change your maximum loan amount, but every extra dollar of deposit becomes an extra dollar of purchasing power.
- How does interest rate affect affordability?
- Higher interest rates significantly reduce your maximum loan amount, because more of each payment goes to interest and less to principal — the same monthly payment supports a meaningfully smaller loan at a higher rate. Small rate changes can move your maximum affordable property price substantially.
- What is a stress test, and does my lender apply one?
- A mortgage stress test checks whether you could still afford the payment if interest rates rose after you take out the loan — many lenders (particularly in the UK and Canada) require you to qualify at a rate several percentage points above the one you'll actually pay. See the Mortgage Stress Test calculator to check your own numbers.
- Should I borrow up to my maximum?
- Not necessarily — this figure is a lender-affordability ceiling, not a recommendation. Borrowing right up to your maximum leaves little buffer for rate rises, income disruption, or other life costs; many financial planners suggest leaving meaningful headroom below your calculated maximum.