How it works
Available principal-and-interest payment = income × debt ratio − other debt − housing overhead. Invert the annuity formula to find principal, then add down payment.
Input definitions
- Gross monthly income
- Enter the value in the labeled unit.
- Maximum total debt-to-income (%)
- Enter the value in the labeled unit.
- Other monthly debt payments
- Enter the value in the labeled unit.
- Monthly property tax, insurance and fees
- Enter the value in the labeled unit.
- Nominal annual mortgage rate (%)
- Enter the value in the labeled unit.
- Mortgage term (months)
- Enter the value in the labeled unit.
- Down payment
- Enter the value in the labeled unit.
A worked example
- Gross monthly income
- 5000
- Maximum total debt-to-income (%)
- 36
- Other monthly debt payments
- 300
- Monthly property tax, insurance and fees
- 500
- Nominal annual mortgage rate (%)
- 0
- Mortgage term (months)
- 360
- Down payment
- 20000
Assumptions & limits
Entered single-currency amounts and fixed rates; monthly interest and two-decimal half-up rounding. No tax, lending approval, changing rates or live market data.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-17. Content checked against the stated method and examples. Our verification approach.
Common questions
Is this mortgage budget a lender approval?
No. You set the debt ratio and costs. Lenders also assess credit, income stability, loan type and local rules; the result is a scenario budget.
How does Mortgage affordability from a payment budget work?
Available principal-and-interest payment = income × debt ratio − other debt − housing overhead. Invert the annuity formula to find principal, then add down payment.
What are the limits of Mortgage affordability from a payment budget?
Entered single-currency amounts and fixed rates; monthly interest and two-decimal half-up rounding. No tax, lending approval, changing rates or live market data.