The concept
What mortgage affordability estimates
Affordability ratios are screening assumptions, not approval rules. Lenders and jurisdictions use different income definitions, stress tests and expense allowances.
This model excludes property tax, insurance, fees and maintenance, so its result is an illustrative ceiling rather than a spending recommendation.
The method
How the calculation works
Gross income is converted to a monthly figure. The calculator applies both entered ratios, subtracts existing monthly debts from the total-debt allowance, and uses the tighter payment limit to estimate a loan present value.
The lower of the housing-ratio and total-debt-ratio budgets is converted into a loan amount using the entered rate and term.
Worked example
A neutral example
With $120,000 annual income, $500 monthly debts, an $80,000 down payment, a 6% rate and a 30-year term, the 28% housing ratio is tighter than the entered 36% total-debt ratio.
This example explains the method. It does not recommend a financial action or predict an outcome.
Frequently asked
Mortgage Affordability Calculator questions
Does this guarantee mortgage approval?+
No. It is a mathematical ratio model only.
Are property taxes and insurance included?+
No. Add those costs separately when evaluating a real budget.
Why are both ratios editable?+
Conventions differ, so the assumptions remain visible and user controlled.