How much house can I afford?
There is no single answer, because lenders use different tests. This calculator runs two of them on the same income and deposit and shows them side by side, so you can see how far apart they are.
With the defaults, a household earning $90,000 a year with a $40,000 deposit gets:
- Income multiple of 4: a $360,000 loan and a $400,000 home, at 90% loan-to-value.
- Payment ratios of 28% and 36%: a $268,958 loan and a $308,958 home, at 87.1% loan-to-value, at 6.5% over 30 years with $500 of other debts and $400 a month of tax and insurance.
The gap, $91,042 on the default inputs, is the point of the comparison. The multiple ignores the interest rate and your other debts; the ratios are built from them. Neither result is an offer or a lender's decision, and every input, including the multiple and both ratios, is yours to change.
How does the income multiple method work?
The loan is gross annual income times a multiple: loan = income x multiple, and price = loan + deposit. Joint borrowers add their incomes first. The calculator also shows what that loan would cost each month at the rate and term you enter, and that payment as a share of gross monthly pay, so the multiple can be checked against cash flow. On the defaults, a 4 times loan of $360,000 costs $2,275.44 a month at 6.5% over 30 years, 30.3% of gross monthly income of $7,500.
In the UK, the Bank of England's Financial Policy Committee sets a limit on high loan-to-income lending. A Prudential Regulation Authority policy statement, PS19/26, published on 14 October 2026, defines a high loan-to-income mortgage as one that is or exceeds 4.5 times the borrower's income, using joint income for joint borrowers. The FPC's limit keeps such loans to 15% of the aggregate flow of new mortgages. The same statement removed the firm-specific 15% cap from 28 October 2026, so a single lender's share can exceed 15% while the market-wide limit remains; the Financial Conduct Authority's matching guidance is FG26/11. The limit is a market-wide flow measure, not a ceiling on any one borrower.
How do front-end and back-end ratios work?
The payment-ratio method starts from monthly cash flow. Gross monthly income is annual income divided by 12, and two caps are applied:
- Front-end ratio: housing costs (principal, interest, property tax and insurance) as a share of gross monthly income. At 28% of $7,500 that is $2,100, which leaves $1,700 for principal and interest after $400 of tax and insurance.
- Back-end ratio: housing costs plus all other debt payments as a share of gross monthly income. At 36% that is $2,700; less $500 of other debts and $400 of tax and insurance leaves $1,800.
The lower of the two, $1,700, is the payment the loan must fit. The loan is that payment's present value: loan = payment x (1 - (1 + i)^-n) / i, with i the monthly rate and n the number of payments, which gives $268,958 at 6.5% over 30 years.
The ratios themselves are inputs, not rules. In the US, the Consumer Financial Protection Bureau announced on December 10, 2020 a final rule that removed the fixed 43% debt-to-income cap from its General Qualified Mortgage definition and replaced it with a limit based on the loan's price compared with the average prime offer rate. Under that rule lenders must still consider the borrower's debt-to-income ratio or residual income, but the ratio each lender uses is its own choice.
Why do the two methods give different answers?
The income multiple does not look at the interest rate, so the loan it allows stays the same whatever rates do. The payment-ratio method turns a fixed monthly payment into a loan, and a higher rate means that payment repays less. On the default inputs:
| Rate, 30 years | Income multiple of 4: price | Payment on that loan | Payment ratios: price |
|---|---|---|---|
| 5.5% | $400,000 | $2,044.04 | $339,407 |
| 6.5% | $400,000 | $2,275.44 | $308,958 |
| 7.5% | $400,000 | $2,517.17 | $283,130 |
| 8.5% | $400,000 | $2,768.09 | $261,091 |
At 8.5% the multiple's loan would take 36.9% of gross monthly pay before tax and insurance, against 27.3% at 5.5%. So a multiple on its own says nothing about whether the payment fits a budget. The chart under the result shows the same comparison for your inputs, and the panel beside it gives the other method's figure without switching tabs.
How much house can I afford on a $50,000, $100,000 or $150,000 salary?
The table runs both methods for several incomes with the same $40,000 deposit, a 6.5% rate over 30 years, $500 of other debts and $400 a month of tax and insurance. These are the defaults, not anyone's lending criteria.
| Gross income | Income multiple of 4: price | Payment ratios 28% / 36%: price | Limit that applies |
|---|---|---|---|
| $50,000 | $240,000 | $134,926 | Back-end |
| $60,000 | $280,000 | $182,390 | Back-end |
| $80,000 | $360,000 | $272,043 | Front-end |
| $100,000 | $440,000 | $345,874 | Front-end |
| $150,000 | $640,000 | $530,454 | Front-end |
| $200,000 | $840,000 | $715,033 | Front-end |
At lower incomes the fixed $500 of other debts and $400 of costs take a larger share of pay, so the back-end ratio binds and the gap between the methods widens. At $50,000 the payment-ratio price is little more than half the multiple's.
Worked examples in pounds and dirhams
Pounds, income multiple. A couple earning £70,000 between them with a £30,000 deposit tests a multiple of 4.5. The loan is £70,000 x 4.5 = £315,000 and the price £345,000, at 91.3% loan-to-value. At 4.5% over 25 years the payment is £1,750.87 a month, 30.0% of gross monthly income of £5,833. At exactly 4.5 times, this loan would count as high loan-to-income lending under the PRA definition, which includes loans at 4.5 times income.
Dirhams, both methods. A household earning AED 400,000 a year with an AED 200,000 deposit, no other debts and AED 1,500 a month of costs, at 4.25% over 25 years. A multiple of 4 allows AED 1,600,000 and a price of AED 1,800,000, at 88.9% loan-to-value, with a payment of AED 8,667.81. Ratios of 28% and 36% allow AED 7,833.33 a month of principal and interest, an AED 1,445,963 loan and an AED 1,645,963 price. With no other debts, the front-end ratio is the tighter limit. The calculator formats every amount in the currency you choose and never converts between currencies.
How does each input move the answer?
- Income moves both methods in proportion, before fixed costs and debts.
- Deposit adds to the price one for one and lowers the loan-to-value; it does not change the loan either method allows.
- Interest rate changes only the payment-ratio loan. At 6.5% over 30 years, each $100 a month of payment supports $15,821 of loan.
- Term matters to the ratios too: on the defaults, 25 years supports a $291,775 price and 15 years $235,154, against $308,958 over 30.
- Other debts count only through the back-end ratio. On the defaults, debts of up to $600 a month leave the price unchanged because the front-end cap binds; at $800 the back-end cap takes over and the price falls to $277,316.
- Tax and insurance reduce both caps: $100 a month more cuts the default price to $293,137.
What loan-to-value does my deposit give?
Loan-to-value is the loan divided by the price. A $40,000 deposit on the $400,000 price from the multiple is a 10% deposit and a 90% LTV; the same deposit on the $308,958 price from the ratios is 12.9%, so the LTV is 87.1%. A larger deposit lowers the LTV. The LTV calculator works the other way round, from a property value and a target LTV to the largest loan.
Common mistakes and what this calculator leaves out
- Treating the result as a lending decision. Lenders also look at credit history, employment, spending, the property itself and their own stress tests.
- Using take-home pay. Both methods here use gross income, before tax.
- Forgetting the running costs. Tax, insurance and fees reduce what the payment-ratio method allows; leave them at zero and the answer is too high.
- Reading a multiple as a rate-proof answer. The same multiple costs far more a month when rates are higher, as the table above shows.
The calculator does not include closing costs, stamp duty or other purchase taxes, mortgage insurance, homeowner association dues unless you add them to tax and insurance, or any change in rates during the term. It assumes a repayment loan with a fixed rate and level monthly payments. It does not say what any lender would offer.
Glossary
Income multiple: the loan divided by gross annual income. Loan-to-income (LTI): the same ratio, the term the Bank of England uses. Front-end ratio: monthly housing costs divided by gross monthly income. Back-end ratio: housing costs plus other debt payments divided by gross monthly income, also called debt-to-income (DTI). Deposit or down payment: the part of the price paid upfront. Loan-to-value (LTV): the loan divided by the price or valuation. Residual income: what is left each month after debts and living costs. Flow limit: a cap on the share of new lending, as opposed to a limit on each loan.
Frequently asked questions
How much house can I afford on $90,000 a year?
With a $40,000 deposit, an income multiple of 4 supports a $400,000 home. Payment ratios of 28% and 36% at 6.5% over 30 years, with $500 of other debts and $400 of tax and insurance, support $308,958.
How many times my salary can I borrow for a mortgage?
The calculator lets you enter any multiple from 1 to 8 and shows the loan and price it gives. In the UK, loans at 4.5 times income or more count as high loan-to-income lending under the Bank of England FPC flow limit.
What is the Bank of England 4.5 times income limit?
It is a limit on the share of new UK mortgages lent at 4.5 times income or more, set at 15% of the market-wide flow. Under PRA policy statement PS19/26 of 14 October 2026, from 28 October 2026 individual lenders may go above 15% while the aggregate limit stays.
What is the difference between front-end and back-end ratios?
The front-end ratio counts housing costs only: principal, interest, tax and insurance. The back-end ratio adds every other debt payment. The lower cap on principal and interest is the one that limits the loan.
Is 43% still the maximum debt-to-income ratio in the US?
Not as a fixed federal cap for General Qualified Mortgages. A CFPB final rule announced on December 10, 2020 replaced the 43% limit with a price-based test, while lenders must still consider debt-to-income or residual income.
Why does the interest rate not change the income multiple result?
Because the multiple is applied to income alone. The rate changes what that loan costs each month, which the calculator shows as the payment and its share of gross pay.
Do other debts reduce how much I can borrow?
Under the payment ratios, yes, once the back-end ratio becomes the tighter limit. On the defaults, debts above $600 a month start to cut the price; at $800 it falls to $277,316.
Should I use gross or net income?
Both methods here use gross income before tax. Testing the payment against take-home pay as well gives a stricter view of your own budget.
What loan-to-value will I have?
Divide the loan by the price. On the default multiple, a $360,000 loan on a $400,000 home is 90% loan-to-value; the result shows it for both methods.
Does it work in pounds and dirhams?
Yes. Choose GBP, AED or any of the 24 currencies. A £70,000 income at 4.5 times with a £30,000 deposit supports a £345,000 home.
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Last reviewed 14 November 2026 by the NIFM Academy editorial team. Next review by 14 November 2027.
- Prudential Regulation Authority, PS19/26 High loan to income lending, and SS2/26, published 14 October 2026: high LTI is a loan at or above 4.5 times income (joint income for joint borrowers); the FPC limit is 15% of the aggregate high-LTI flow; the firm-specific 15% cap is removed and the rules commence 28 October 2026. Checked 14 November 2026.
- Financial Conduct Authority, FG26/11 High loan to income lending, first published 14 October 2026; individual lenders may increase their share of high-LTI lending above 15% while the aggregate flow is kept consistent with the 15% limit. Checked 14 November 2026.
- Consumer Financial Protection Bureau, General QM final rule press release, December 10, 2020: removes the 43% debt-to-income limit from the General QM definition and replaces it with a price-based limit; creditors must still consider DTI or residual income. Checked 14 November 2026.
- Present value of a level payment, loan = payment x (1 - (1 + i)^-n) / i, with i = rate / 12 and n = years x 12; reproduced in the working. Checked 14 November 2026.