What Is a Mortgage Affordability Calculator?
This calculator estimates what a chosen mortgage scenario could cost each month — the principal-and-interest repayment plus the recurring property costs you enter — and compares that with the income and debt payments you provide. It doesn't estimate how much a lender would let you borrow, assess eligibility or decide what is affordable for you. It simply makes the numbers transparent so you can compare scenarios.
What Affects Mortgage Affordability?
- Income — what comes in each month, before and after tax.
- Mortgage size — the amount borrowed after your down payment or deposit.
- Interest rate and loan term — together these set the scheduled repayment. See How Mortgage Repayments Are Calculated.
- Down payment or deposit — a larger one reduces the loan but leaves less cash. See Bigger Down Payment vs Smaller Down Payment.
- Existing debts — regular commitments that compete with the mortgage for the same income.
- Property expenses — taxes or rates, insurance, HOA or strata fees, and maintenance.
- Cash reserves — savings left after purchase to absorb surprises.
Borrowing Capacity vs Affordability
Borrowing capacity is a lender's assessment of how much it may be willing to lend, based on its own criteria and the rules that apply where you live. Affordability is personal: whether the repayment and the other costs of owning the home fit comfortably alongside everything else in your budget. The two can be quite different, and the maximum a lender offers isn't necessarily the amount that suits you.
Why Test a Higher Interest Rate?
Showing the same mortgage at a higher rate helps you see how sensitive your budget is to a change in borrowing costs. It isn't a forecast and isn't the same as a lender's serviceability or qualification test — it's a simple way to understand how much room you'd have if repayments rose. Read more in How a 1% Interest Rate Change Affects Your Mortgage.
Costs Beyond the Mortgage
The repayment is rarely the full cost of owning a home. In the US, property tax, homeowners insurance, HOA fees and PMI may apply. In Australia, council rates, home or building insurance and strata or body corporate fees may apply, and LMI may be payable depending on the loan. Maintenance, repairs and utilities add to the picture too. For a fuller walkthrough, see How Much Mortgage Can You Afford? The Numbers to Check Before You Buy.
Frequently Asked Questions
What does the Mortgage Affordability Calculator calculate?
It estimates the monthly principal-and-interest repayment for the mortgage scenario you enter, adds the recurring property costs you include, and compares the total with the gross household income and existing debt payments you enter. It also shows the same mortgage at a higher interest rate.
Does this calculator tell me how much I can borrow?
No. It does not estimate borrowing capacity or a maximum loan amount. Lenders assess borrowing capacity using their own criteria, which vary by lender and country.
Does this calculator determine whether I will qualify for a mortgage?
No. It is an educational scenario-planning tool. It does not assess eligibility, credit, serviceability or loan approval.
What housing costs should I include?
Include recurring costs you expect to pay for the property. In the US this may include property tax, homeowners insurance, HOA fees and PMI where applicable. In Australia this may include council rates, home or building insurance and strata or body corporate fees where applicable.
Why does the calculator compare my mortgage at a higher interest rate?
Showing the same mortgage at a higher rate helps you see how sensitive your budget is to a change in borrowing costs. It is an illustration only, not a prediction of future rates or a lender serviceability assessment.
What is the difference between mortgage affordability and borrowing capacity?
Borrowing capacity is what a lender may be willing to lend under its criteria. Affordability is whether the repayment and other ownership costs fit comfortably within your own finances and priorities.
Does a larger down payment make a mortgage more affordable?
A larger down payment or deposit reduces the amount borrowed, which usually reduces the repayment, all else being equal. It also leaves less cash available after the purchase, so the trade-off depends on your circumstances.
Does the calculator work for both the United States and Australia?
Yes. Use the country selector to switch between US and Australian terminology and property-cost fields. Lending rules and costs differ between the two countries, and between lenders.