Home Affordability Calculator — How Much House Can You Afford?
Enter your monthly income, other debt payments, available down payment, and expected interest rate. CalcWize uses debt-to-income (DTI) caps to back out the maximum monthly mortgage you can afford — and from that, a maximum purchase price. Country-aware property tax and insurance assumptions are baked in.
Why DTI matters
Lenders cap your housing payment at a percentage of gross monthly income (typically 28–36% in the US, similar elsewhere). Total debt — including this future mortgage — is usually capped at 36–43%. CalcWize uses these caps to show the ceiling, not the comfortable middle.
Property tax & insurance
Default property-tax rates vary by country: ~1.1% in the US, ~1.0% in ZA, ~0.4% in DE, basically zero in the UK (Council Tax is flat). Override the default if your local rate differs.
A worked example
Take a $90,000 gross annual income (about $7,500/month), $300/month of other debt, $50,000 saved for a down payment, a 6.5% mortgage rate, and a 36% DTI cap. CalcWize works back through the numbers and shows the maximum monthly mortgage payment you can carry, then converts that into a maximum purchase price. Tweak any input — bump the down payment to $80,000, drop the rate to 5.5% — to see how each lever changes the ceiling.
The "max" trap
Lenders and online calculators show you the maximum a bank will lend, not the maximum you should borrow. Maximising the mortgage payment leaves no buffer for property tax surprises, repairs, lifestyle upgrades, or job interruptions. Many financial planners suggest keeping the housing payment closer to 25% of gross income — well below the 36% cap — so the rest of your budget breathes.
Closing costs and reserves
Most regions charge 2–5% of the purchase price in closing costs (legal fees, transfer duty, lender fees, inspections). Lenders also typically want 2–6 months of mortgage payments in cash reserves after closing. CalcWize doesn't bake these in — make sure you have them on top of the down payment before you commit to a price the calculator says you can afford.
Frequently asked questions
- Is the maximum the amount I should borrow?
- No — it is the lender’s ceiling, calculated to protect the lender. Many planners suggest keeping housing nearer 25% of net income so the rest of your budget can breathe. See our home-affordability guide.
- What costs aren’t included?
- Closing costs (typically 2–5% of the price), ongoing maintenance (around 1% of the home’s value a year), and cash reserves sit on top of the price the calculator returns.
- Does it guarantee mortgage approval?
- No. Lenders also weigh your credit score, employment history, and the property itself, none of which this estimate models.
How we calculate it
The calculator works backward from your income and debts using debt-to-income caps (commonly around 28% of gross income on housing and 36% on total debt) to a maximum monthly payment, then converts that — with your rate, term, and down payment — into a maximum purchase price. Country-specific property-tax and insurance assumptions are built in.
What it doesn't do
- Final mortgage approval (lenders look at credit score, employment history, etc. that this tool doesn't model)
- Investment-property analysis (this assumes primary residence)
Last reviewed: 2026-05