How the limit is derived
Your gross monthly income is multiplied by the debt-to-income limit, typically 36%. Existing debt payments are subtracted, leaving the monthly amount available for housing. That figure is converted into a loan size using the interest rate and term, and your down payment is added to give the maximum price.
The 36% default is conservative and reflects what most lenders prefer. Some will stretch to 43% or beyond, which increases the number this calculator returns but leaves you with far less monthly flexibility.
What the maximum ignores
Borrowing the maximum is rarely wise. This figure does not account for property tax, insurance, maintenance, or the reality that your life will change over a thirty-year loan. Many buyers target 70 to 80% of their theoretical maximum precisely so that a job change or a new child does not turn the mortgage into a crisis.
Also budget for the costs of buying itself: stamp duty or transfer taxes, legal fees, surveys and moving, which commonly add 3 to 8% of the purchase price.
Frequently asked questions
Should I borrow the maximum shown?
Usually not. The maximum is what a lender permits, not what leaves you comfortable. Many buyers deliberately target 70 to 80% of it.
What debt-to-income limit should I set?
36% is the conservative standard and the default here. Some lenders allow 43% or more, which raises the figure but reduces your monthly breathing room.
Does this include property tax and insurance?
No, it sizes the loan payment only. Those costs consume part of your real budget, so treat the result as an upper bound and check the full payment in our mortgage calculator.
How much down payment do I need?
It varies by market and product, from about 5% to 20%. Reaching 20% typically avoids mortgage insurance and unlocks better rates.
Does my credit score change what I can borrow?
It mainly affects the rate you are offered, which then changes affordability. A better score means a lower rate and therefore a larger affordable loan.
Is my partner's income counted?
If you apply jointly, yes. Enter combined gross income and combined debt payments to model a joint application.