How to Check Mortgage Affordability
Understand monthly payment, loan-to-value, down payment and payment burden before comparing offers.
What it does and when to use it
A mortgage decision is not only the home price. Estimate loan amount, down payment, rate, term, LTV and whether the monthly payment leaves enough room for normal living costs.
What information to enter
Enter property price, down payment, term, annual interest rate and monthly net income. If you have large fixed costs, test a lower available-income scenario as well.
How to understand the result
The result estimates monthly payment, LTV and payment burden. A lower payment ratio leaves more room for rate changes, repairs and family expenses.
Recommended step-by-step workflow
- Check the assumptionsA mortgage decision is not only the home price. Estimate loan amount, down payment, rate, term, LTV and whether the monthly payment leaves enough room for normal living costs.
- Use matching unitsEnter property price, down payment, term, annual interest rate and monthly net income. If you have large fixed costs, test a lower available-income scenario as well.
- Compare with another scenarioThe result estimates monthly payment, LTV and payment burden. A lower payment ratio leaves more room for rate changes, repairs and family expenses.
Formula at a glance
Short example
Common mistakes
- Testing only a low-rate scenario without a stress case.
- Forgetting closing costs, insurance, taxes, repairs and moving expenses.
Frequently Asked Questions
What payment ratio is safer?
There is no universal rule. As a planning benchmark, around 30% of net income is more conservative, while 40% requires caution.
Does this replace a mortgage quote?
No. It is an initial estimate, not a lender offer or financial advice.
Why check LTV?
Higher LTV leaves less equity cushion and can affect financing terms.
Are my inputs saved?
No. The calculator runs in the browser and does not store your personal input values.