Australia
Mortgage affordability calculator
Before you start viewing homes it helps to know the ballpark you can afford. This estimates how much you might borrow and the property price that supports, working from your income, any existing debt repayments, your deposit and an assumed mortgage rate. Enter those four things and it returns an indicative loan amount and a total budget. It is a starting point for house hunting and a reality check on listings, not a lending decision. Real lenders apply their own rules, so use the figure to set expectations rather than to commit.
A rough guide using a 36 percent debt-to-income limit. Lenders run their own affordability and stress tests, so the real figure can differ. Not a mortgage offer.
How it works
- Enter your gross annual income and the total of any monthly debt payments you already have.
- Add your deposit, an expected mortgage rate and the term in years.
- The model caps your total monthly debt, including the new mortgage, at 36 percent of gross monthly income.
- It subtracts existing debts from that cap to find the affordable mortgage payment, then reverses the amortisation maths to a loan size, and adds the deposit for the property budget.
payment = 0.36 x gross monthly income - existing debts; loan = present value of that payment; budget = loan + deposit
The model caps all your monthly debt at 36 percent of gross monthly income, then takes off any payments you already make to leave room for a mortgage. That affordable payment is run backwards through the amortisation formula at your rate and term to find the loan it supports. Adding your deposit to the loan gives an indicative property budget.
- 0.36
- debt-to-income cap on total monthly debt
- existing debts
- monthly payments already committed
- deposit
- cash you put in alongside the loan
Affordability rules of thumb
| Typical loan-to-income cap, UK | 4 to 4.5x income | most lenders, most cases |
| Debt-to-income guideline | ≈ 36% | total monthly debt of gross income |
| Common minimum deposit | 5 to 10% | of the property price |
| Lender stress-test rate | pay rate + ~1 to 3% | checks you cope if rates rise |
Worked example
A 50,000 income, no other debts, a 20,000 deposit, 5 percent over 25 years: a 36 percent cap allows about 1,500 a month, which supports roughly 256,000 of borrowing. With the deposit on top, that points to a property budget near 276,000. Existing debts would lower it.
Key facts
- The 36 percent cap counts the new mortgage plus every existing debt, so loans and card minimums shrink the room left.
- A higher interest rate lowers the loan a given payment supports, since more of each payment goes on interest.
- UK lenders often size lending on a multiple of income as well, commonly around 4 to 4.5 times.
- The deposit adds to your budget pound for pound on top of the loan the income supports.
Tips
- Clear a card balance or finish a car-finance deal before applying, since each frees room under the cap.
- Treat the figure as a ceiling, not a target, and leave headroom for rate rises and life changes.
- A larger deposit can unlock a lower mortgage rate, which in turn lifts what your income will support.
- Get a decision in principle from a lender before viewing, as their real assessment can differ from any guide.
Indicative borrowing at 5% over 25 years, no other debts
| Gross income | Cap a month | Loan supported |
|---|---|---|
| 30,000 | 900 | 154,000 |
| 50,000 | 1,500 | 257,000 |
| 70,000 | 2,100 | 359,000 |
| 100,000 | 3,000 | 513,000 |
Frequently asked questions
Will a lender offer exactly this amount?+
No, treat it as a guide. Lenders run their own affordability assessments, stress tests against higher rates, and credit checks, so the figure they offer could be higher or lower than this estimate.
Where does the 36 percent come from?+
It is a widely used debt-to-income guideline: total monthly debt, the mortgage included, kept to around a third of gross monthly income. Some lenders are more generous, others stricter.
Should I borrow the maximum it shows?+
Not necessarily. The cap is an upper limit, not a recommendation. Leaving headroom protects you against rate rises, repairs and changes in income, which a maxed-out budget does not.
How do existing debts change the result?+
Car finance, loans and card minimums all count toward the 36 percent cap, so they reduce what is left for a mortgage. Clearing some debt before applying can lift your budget.
Things to watch
- This is general information, not financial advice, and not a mortgage offer.
- Lenders run their own affordability checks, stress tests and credit searches, so their figure can be higher or lower.
- The result ignores running costs, so do not assume the maximum is comfortable to repay month to month.
Last updated: 2026
This is an estimate for general guidance, not financial, tax, legal or medical advice. Figures can change and individual circumstances vary. Always confirm with the official sources listed before making decisions.
- This is general information, not financial advice.
- A rough guide, not a mortgage offer; speak to a broker or lender for a real assessment.
- Uses a 36 percent debt-to-income cap, which varies between lenders and countries.
Reviewed by Vikas Dulgunde.