Before a lender looks at the house, they look at two ratios: how much of your income the housing payment would eat (the front ratio) and how much all your debts together would eat (the back ratio). This mortgage affordability calculator applies that same debt-to-income logic — with the classic 28/36 limits as editable presets — to your gross income, your existing monthly debts, an interest rate and a term, and returns the maximum monthly payment a lender working to those rules would allow, and the loan that payment supports. It is an estimate of a borrowing cap, not an offer, an approval or advice: real lenders add credit history, employment and their own stress tests on top.
The two caps, and why the lower one wins
The front ratio caps the housing payment alone: at 28%, a gross income of 6,000 a month allows 1,680 for mortgage, and in a full lender model also for property tax and insurance escrowed inside that payment. The back ratio caps everything: at 36%, all debts including the new mortgage may not exceed 2,160, so existing debts of 300 leave 1,860 for housing. Your cap is the lower of the two — here 1,680, set by the front ratio. Watch what happens when debts rise to 800: the back ratio leaves only 1,360, and it becomes the binding cap. That is the mechanical reason paying down a car loan before applying can raise your mortgage cap by more than the loan payment you removed.
From payment cap to loan size
A payment becomes a loan through the annuity formula: loan = payment × (1 − (1 + r)−n) ÷ r, with r the monthly rate and n the months. At 6% over 30 years the factor is 166.79, so the 1,680 cap supports a loan of about 280,210. Change the rate and the cap in loan terms moves violently while the payment cap stays still: at 3% the same payment supports roughly 398,500; at 8%, roughly 228,900. This is why “how much can I borrow” has no answer until a rate and term are pinned — the calculator makes you pin them, and why stretching the term raises the loan but also the total interest in ways the headline hides.
Using the presets honestly
28/36 is a long-standing guideline (it traces to US underwriting practice), not a law of nature: some lenders work to 31/43, some to a single 40–45% back ratio, and many apply an affordability stress test at a higher rate than the one you will pay. The fields are editable for exactly that reason — if a lender has told you their ratios, use theirs. Also note what the classic model counts as “housing”: principal, interest, property tax and homeowner’s insurance. If your tax and insurance are heavy, the loan-only payment a strict lender allows is the cap minus those monthly amounts.
Estimate framing — read before relying
This calculator estimates a cap from ratios and an annuity formula; it does not check credit, verify income, reserve for closing costs, or predict any lender’s decision, and rates and rules change. Treat the output as the top of a range to plan around — then confirm with an actual lender or broker before you shop, and keep your real budget below the cap: the lender’s maximum is the most they will risk on you, not a recommendation for what to spend. Our Spanish companion runs the same borrowing-cap logic for Spanish-bank practice, where the income percentage is usually applied net.
A last check before you house-hunt
Run the calculator twice: once at the rate you hope to pay, once two points higher. The payment cap does not move — it is a ratio of your income — but the loan it supports falls by roughly a fifth in the example above, which is the lender’s stress test happening on your own screen. If the higher-rate loan still buys the house you need, your plan survives a rate rise; if it does not, the honest fix is a bigger deposit or a cheaper house, discovered now rather than at the offer stage.
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Versión en español: Calcular Capacidad de Endeudamiento Hipoteca Banco Máximo: Cuánto Te Pueden Prestar Según Tus Ingresos · Net Rental Yield Calculator.
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