How Much House Can I Afford? Calculator

How lenders decide how much you can borrow

Lenders check two ratios at a higher qualifying rate, not your actual rate. Your housing costs (mortgage payment, property tax, heating and half of condo fees) can be at most 39% of gross income (GDS), and all debt payments together at most 44% (TDS). The qualifying rate is the greater of your rate plus 2% or 5.25%: the mortgage stress test. Your down payment must also meet the minimum for the price.

How much house can I afford on $140,000 a year?

With $140,000 of household income, $400 a month in other debts, $100,000 down, $5,000 a year in property tax and a 4.5% rate over 25 years, the stress test uses 6.5% and the most a lender would likely approve is about $684,000, with a mortgage of about $602,104. What holds it back here is housing costs (GDS 39% of income).

$100,000 down, $400 a month in other debts, $5,000 property tax, 4.5% rate, 25-year amortization.

What this estimate doesn’t include

• Your credit score and history, which every lender checks.
• Lender-specific policies; some lenders use lower limits or count income differently.
• Closing costs (about 1.5% to 4% of the price), which you need on top of the down payment.
• Whether the payment fits your own budget. The maximum a lender approves isn’t the same as what’s comfortable.

Next steps

• Mortgage payment calculator · see the actual payment at your rate
• Land transfer tax calculator · budget for the biggest closing cost