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Calculate your maximum home purchase price and borrowing power based on standard underwriter debt-to-income (DTI) rules, property taxes, insurance, and recurring debt.
Under Bank of England FCA regulatory lender flow limits (max 4.5× gross annual earnings + deposit), this income supports a UK property value of up to £600,000.
This Mortgage Affordability Calculator evaluates the maximum home purchase price and loan balance you can realistically qualify for under standard consumer lending guidelines. It calculates your maximum borrowing power using both Front-End (housing ratio) and Back-End (total debt-to-income) underwriting rules, while fully accounting for real-world recurring expenses including property taxes, homeowners insurance, HOA dues, and existing debt obligations (auto loans, student loans, and credit cards).
Worked Example (Standard Underwriting Defaults): Consider a household earning $120,000 annually ($10,000/month gross) with $500/month in non-mortgage debts (auto/student loans), a $60,000 down payment, and a 30-year fixed loan at 6.5% interest with 1.2% property taxes and $1,500/yr insurance: • Front-End Budget (28% of $10,000) = $2,800/month. • Back-End Budget (36% standard DTI) = 36% of $10,000 ($3,600) − $500 debt = $3,100/month. • Controlling Housing Payment: Front-End budget controls at $2,800/month. • Monthly Housing Allocation: $2,258 Principal & Interest + $417 Property Tax + $125 Homeowners Insurance = $2,800/month. • Maximum Borrowing Power (Loan): $357,207. • Maximum Home Purchase Price: $357,207 loan + $60,000 down payment = $417,207.
Compare your Maximum Home Price to local listings in your target market. If your Front-End DTI is green (≤28%) and Back-End DTI is under 36%, you fall into the 'prime conforming' tier with access to the lowest interest rates and easiest underwriting approvals. If your debts push your Back-End DTI above 45%, lenders may require additional cash reserves or higher credit scores to issue an approval.
The 28/36 rule is the classic benchmark used by mortgage underwriters. It stipulates that no more than 28% of your gross monthly income should go toward housing expenses (mortgage principal, interest, taxes, insurance, HOA), and no more than 36% should go toward total debt service (housing costs plus student loans, car notes, and minimum credit card payments).
The CFPB revised the General Qualified Mortgage rule to replace the strict 43% DTI ceiling with an Annual Percentage Rate (APR) pricing threshold above the Average Prime Offer Rate (APOR). While lenders assess ability-to-repay and maintain internal DTI guidelines (typically 36% to 45% for conventional automated underwriting), the rigid federal 43% DTI limit no longer controls QM status.
Every dollar of monthly non-mortgage debt reduces your maximum allowable monthly mortgage payment dollar-for-dollar once your back-end DTI becomes the binding constraint. For example, a $500/month car payment at a 6.5% 30-year mortgage rate reduces your borrowing power by roughly $79,000.
In the United Kingdom, the Financial Policy Committee (FPC) of the Bank of England enforces a lender flow limit: banks cannot allow more than 15% of their new residential mortgage lending to exceed 4.5 times the borrower's gross annual income (£). Lenders must also stress-test whether the borrower could afford repayments if mortgage interest rates were to rise significantly.
If your down payment is less than 20% of the purchase price on a conventional US loan, lenders typically charge PMI (usually between 0.3% and 1.2% of the loan amount annually). If applicable, you can account for PMI by adding its estimated monthly amount to the HOA/Extra Fees field.
Mortgage lenders and underwriting systems evaluate your eligibility based on pre-tax gross income because tax deductions, pre-tax retirement contributions, and personal withholdings vary widely across individuals. However, for personal budgeting, you should always check whether the resulting monthly payment comfortably fits within your actual net take-home pay.
Data verified: September 2026