How much house can I afford?
Work out the most you could borrow and the home price you could afford from your income, debts and deposit, using the lending rules of your country, including Canada’s stress test.
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How lenders decide what you can borrow
Every lender asks two questions: can you keep up the payments, and how much of the price are you putting in yourself? The first sets a limit based on your income and other debts; the second sets a maximum loan-to-value (LTV). The lower of the two is what you can borrow, and adding your deposit gives the price you can afford.
Example: a household earning 90,000 with a 50,000 deposit
| Country | Rule | Home you could afford |
|---|---|---|
| United Kingdom | 4.5 times income | about £455,000 |
| Canada | 39% of income, tested at 7% (5% rate + 2%) | about $396,000 |
| United States | 28% of income on housing costs | about $337,000 |
| UAE | 50% debt burden, but at most 80% loan-to-value | AED 250,000 (your deposit sets the limit) |
Same income, very different answers, because the rules differ. The UAE result shows the other limit at work: with an 80% maximum loan, a 50,000 deposit can only ever support a 250,000 home, whatever you earn.
The rules by country
- United Kingdom: most lenders lend up to 4.5 times household income; some go to 5 or 5.5 times for higher earners or first-time buyers. Maximum 95% of the price.
- United States: the 28/36 rule. Housing costs (mortgage, property tax, insurance) should be at most 28% of gross income, and all debts at most 36%. FHA loans allow more, and conventional loans can go to 97% of the price.
- Canada: gross debt service (GDS) at most 39% and total debt service (TDS) at most 44%, calculated at the stress-test rate: your contract rate plus 2%, or 5.25%, whichever is higher. Under 20% down needs mortgage insurance; the maximum is 95%.
- Australia: lenders add a 3% buffer to your rate when testing repayments, as APRA requires, and most cap total debt at six times income.
- New Zealand: similar test rates, plus the Reserve Bank’s loan-to-value limits (most owner-occupiers need a 20% deposit) and debt-to-income limits of six times income.
- UAE: the Central Bank’s debt burden ratio limits all debt repayments to 50% of income. The maximum loan is 80% for expatriates buying a first home under AED 5 million (85% for UAE nationals), and less for second properties.
- Saudi Arabia: SAMA allows up to 90% of the price for a first home, with repayments limited to around half of income.
What the calculator leaves out
Your credit history, how stable your income is, dependants, and your actual monthly spending, which UK and Australian lenders check line by line. Lenders also vary: one may lend 20% more than another on the same facts. Use the figure here to set a realistic search range, then get a decision in principle from a lender or broker before you make offers. Once you have a price in mind, the mortgage calculator shows the monthly payments and the stamp duty, Australian duty and Canadian land transfer tax tools show the purchase taxes.
Spotted a figure that's wrong or out of date? Tell us and we'll check it against the source.