How much mortgage can I afford?

6 October 2026 · Calcosmo editorial team

How much house you can afford depends mainly on your income, your other debts, the interest rate and your down payment. Lenders use rules such as income multiples and debt-to-income ratios. See what a loan costs per month with the mortgage calculator.

Rule 1: income multiples

Many lenders, especially in the UK and Europe, cap borrowing at a multiple of your gross annual income, typically 4 to 4.5 times (sometimes 5 or more for higher earners or specific schemes). On a household income of £60,000, that suggests a mortgage of roughly £240,000 to £270,000.

Rule 2: the 28/36 rule (US)

US lenders often look at two ratios:

• Front-end ratio: housing costs (mortgage payment, property tax, insurance) should be at most about 28% of gross monthly income.
• Back-end ratio: all monthly debt payments, including car loans and student loans, should be at most about 36%, although many loan programs allow higher.

With a gross income of $100,000 a year ($8,333 a month), 28% is about $2,333 a month for housing.

Worked example

At 6.5% over 30 years, principal and interest per month are:

If property tax and insurance add about $450 a month, a $2,333 housing budget fits a loan of roughly $300,000. With a 20% down payment, that means a home price around $375,000. Compare what a different rate does in how much a 1% higher mortgage rate costs.

What else lenders look at

• Credit score: affects both approval and the rate.
• Down payment: less than 20% often means paying mortgage insurance.
• Employment and income stability: self-employed borrowers usually need two years of accounts.
• Other debts: a car loan or credit card balance directly reduces what you can borrow.

Afford versus qualify

Qualifying for a loan doesn’t mean the payment fits your life. Leave room for savings, maintenance (often 1% of the home value per year) and changes in income. Use the calculator to test a few scenarios before you talk to a lender.