How Much House Can I Afford?
Calculate your maximum borrowing capacity and home purchasing price using statutory debt-to-income (DTI) caps, mortgage stress testing, and real-world property expenses.
SEK 403 533,52
Supports a maximum mortgage of SEK 343 533,52 with your SEK 60 000,00 down payment.
SEK 2 375,00
Total monthly capSEK 2 115,19
Principal & interestSEK 259,81
Monthly escrow items6,25%
Buffer qualificationDebt-to-Income (DTI) Ratios
Statutory LimitsHousing costs (P&I + taxes + insurance) as a percentage of gross monthly income.
Total monthly commitments (housing + credit cards + car loans) divided by gross income.
Calculation is instantly saved in this shareable URL.
🗄️ Saved Comparison Scenarios (Side-by-Side)
How Banks Determine Your Maximum Borrowing Capacity
Underwriting approval is not simply a matter of dividing your salary by twelve. Commercial banks, central bank regulators, and government mortgage agencies use rigid mathematical tests to establish the absolute ceiling of credit they can extend before a loan is classified as predatory or high-risk.
1. Front-End vs Back-End DTI
The Front-End DTI caps your total housing expense (P&I, property taxes, home insurance, HOA dues) at a strict ratio — typically 28% to 35% of gross income. The Back-End DTI factors in all other contractual obligations (student debt, car loans, revolving credit cards), capping total debt service around 43% to 50%.
2. Bank Stress Testing Buffers
Regulators mandate that lenders assess your serviceability at an interest rate significantly higher than the advertised contract rate. For example, the Australian Prudential Regulation Authority (APRA) enforces a minimum 3.0% buffer, while Canadian banks test borrowers under the OSFI stress test at either 5.25% or contract rate plus 2%.
3. Down Payment Leverage & LTV
Your available down payment establishes your Loan-to-Value (LTV) ratio. Supplying 20% down eliminates compulsory private mortgage insurance (PMI/LMI), immediately freeing up hundreds of dollars in monthly cash flow and increasing your maximum purchasing price.
Calculation Methodology & Proof
How much can I borrow?
We cap the housing payment using the selected country's DTI and/or income-multiple rules, then search for the most expensive home whose PITI still fits.
- Compute the maximum monthly housing budget from DTI (and other debts).
- If the country stresses rates, use rate + buffer (or the floor) to size the loan.
- Binary-search home price so PITI (including tax, insurance, PMI, HOA) fits the budget.
- Apply an income-multiple cap when it binds (UK, IE, NO, …).
Important Caveats & Planning Assumptions
- Credit, reserves, and property type are ignored.
- Lender overlays can be tighter than the published rule of thumb.
Frequently Asked Questions
Expert answers to common questions
Why is the max price not just income × 4?
Taxes, insurance, HOA, existing debts, rate, and term all consume the same housing budget. A 4.5× cap (UK) and a 28/36 DTI cap (US) can produce very different ceilings.
What are Ireland's Central Bank mortgage rules?
First-time buyers (FTB) have a Loan-to-Income (LTI) limit of 4.0× gross income and a 90% LTV limit (10% deposit). Second and subsequent buyers (SSB) have a 3.5× LTI limit and 90% LTV limit. Buy-to-let (BTL) has a 70% LTV limit. Lenders hold a 15% flexibility allowance.
What is a Principal Home Bridging Loan in Ireland?
A short-term loan (up to 18 months) allowing homeowners to purchase a new principal home before selling their existing property, with zero capital repayments required during the term.
What is the stressed rate?
In CA, AU, HK and similar markets you must be able to afford a higher hypothetical rate. We qualify the loan at that stress rate, then show the actual payment at today's rate.
Is this an approval?
No. Lenders also check credit, employment, property, and reserves. Treat the result as a planning ceiling.