Mortgage Affordability Calculator

Discover your home buying budget with our comprehensive mortgage affordability calculator. Input your income, monthly debts, down payment, and preferred loan terms to see exactly how much house you can afford. Our calculator considers debt-to-income ratios, property taxes, insurance, and PMI to provide realistic monthly payment estimates. Get pre-qualified confidence and avoid overextending yourself in today's competitive housing market.

Mortgage Affordability Calculator

Calculate how much house you can afford based on your income, debts, and loan parameters.

LKR 0.00
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About This Tool

Learn more about this financial tool.

About Mortgage Affordability Calculator - How Much House Can You Actually Afford?

Buying a house is probably one of the biggest financial decisions you'll ever make, whether you're in Sri Lanka, the United States, Europe, or India. And honestly, figuring out how much you can afford isn't as straightforward as you'd think - especially since mortgage systems vary significantly from country to country. That's where a good mortgage affordability calculator comes in handy.

Homeownership rates vary globally - about 66% in the US, 82% in Sri Lanka, 70% in the EU, and 87% in India - showing just how much we all want that piece of financial security. But here's the thing - just because you want to buy doesn't mean you should max out your budget. Let me walk you through how these calculators work and what you need to know to buy smart in your country.


The Basics: What Actually Affects How Much You Can Afford?

Your Income vs Your Debts (Country-Specific DTI Ratios)

This is the big one. Lenders look at something called your debt-to-income ratio (DTI), but the limits vary significantly by country and loan type:

🇱🇰 Sri Lanka

  • Government Housing Loan: Up to 40% DTI, 10% down payment
  • Private Bank Housing Loan: Up to 35% DTI, 15% down payment
  • Development Finance Loan: Up to 30% DTI, 20% down payment
  • Leasing Company Loan: Up to 28% DTI, 25% down payment

🇺🇸 United States

  • Conventional Loan: Up to 36% DTI, 3% down payment
  • FHA Loan: Up to 43% DTI, 3.5% down payment
  • VA Loan: Up to 41% DTI, 0% down payment
  • USDA Rural Loan: Up to 41% DTI, 0% down payment
  • Jumbo Loan: Up to 43% DTI, 10% down payment

🇪🇺 European Union

  • Standard Mortgage: Up to 33% DTI, 20% down payment
  • First-Time Buyer Loan: Up to 35% DTI, 10% down payment
  • Investment Property Loan: Up to 30% DTI, 25% down payment
  • Self-Employed Loan: Up to 28% DTI, 25% down payment

🇮🇳 India

  • Home Loan (Regular): Up to 40% DTI, 20% down payment
  • PMAY Subsidy Loan: Up to 35% DTI, 10% down payment
  • Construction Loan: Up to 30% DTI, 25% down payment
  • Plot + Construction Loan: Up to 28% DTI, 30% down payment

So if you're making the equivalent of 10,000amonth,yourmaximumtotaldebtpayments(includingyournewmortgage)wouldrangefrom10,000 a month, your maximum total debt payments (including your new mortgage) would range from 2,800 to $4,300 depending on your country and loan type.

Down Payment Requirements Vary by Region

The more you put down, the less you'll pay monthly. But requirements differ:

  • Sri Lanka: Generally 10-25% depending on loan type
  • United States: 0-20% depending on loan program
  • European Union: Typically 10-25%, with 20% being standard
  • India: Usually 10-30% depending on loan type and purpose

Interest Rates Change Everything

Even a 1% difference in rates can cost you thousands. If rates go from 6.5% to 7.5%, that same monthly payment will buy you about 10-15% less house depending on your country's market conditions.


How the Calculator Actually Works

The Core Formula

Here's the math behind your monthly payment (universal across countries):

M=P×r(1+r)n(1+r)n−1M = P \times \frac{r(1+r)^n}{(1+r)^n-1}

Where:

  • M = Monthly payment
  • P = Loan amount
  • r = Monthly interest rate
  • n = Number of payments

Don't worry, the calculator does this for you and automatically converts to your local currency. But it's good to know what's happening under the hood.

What Gets Included

Your monthly housing cost isn't just the mortgage. You've got:

  • Principal and interest (typically about 80% of your payment)
  • Property taxes (we estimate about 1% of home value annually - varies by country)
  • Homeowners insurance (we estimate about 0.5% of home value annually)
  • Additional costs vary by country (stamp duty, maintenance reserves, etc.)

Real-World Examples by Country

Sri Lankan Example (LKR)

Monthly income: LKR 2,500,000, Monthly debts: LKR 500,000 With a Government Housing Loan (40% DTI): Available for housing: LKR 500,000 Could afford a home around LKR 75-85 million with 10% down

US Example (USD)

Monthly income: 10,000,Monthlydebts:10,000, Monthly debts: 2,000 With an FHA loan (43% DTI): Available for housing: 2,300Couldaffordahomearound2,300 Could afford a home around 380,000-420,000 with 3.5% down

European Example (EUR)

Monthly income: €8,000, Monthly debts: €1,500 With a Standard Mortgage (33% DTI): Available for housing: €1,140 Could afford a home around €190,000-220,000 with 20% down

Indian Example (INR)

Monthly income: ₹800,000, Monthly debts: ₹200,000 With a regular Home Loan (40% DTI): Available for housing: ₹120,000 Could afford a home around ₹18-22 million with 20% down


Country-Specific Considerations

🇱🇰 Sri Lanka

  • Government housing schemes offer favorable terms
  • Consider proximity to Colombo for property appreciation
  • Factor in potential currency fluctuation for foreign income earners

🇺🇸 United States

  • State and local taxes vary significantly
  • PMI required for less than 20% down on conventional loans
  • Veterans get special benefits through VA loans

🇪🇺 European Union

  • Regulations vary by country within the EU
  • Energy efficiency ratings affect property values
  • Consider Brexit implications for UK properties

🇮🇳 India

  • PMAY (Pradhan Mantri Awas Yojana) offers subsidies for eligible buyers
  • Joint family considerations may affect loan approvals
  • Property registration costs vary by state

Common Mistakes People Make (Universal)

Getting Pre-Approved and Thinking That's Your Budget

Just because a lender says you qualify for a certain amount doesn't mean you should spend it all, regardless of which country you're in.

Forgetting About the Extras

Buying a house costs more than just the down payment:

  • Sri Lanka: Stamp duty, legal fees, survey costs
  • United States: Closing costs, inspections, title insurance
  • European Union: Notary fees, registration taxes, surveys
  • India: Registration fees, stamp duty, legal charges

Not Shopping Around for Rates

Different lenders offer different rates in every country. Even a 0.25% difference can save you thousands over the life of your loan.


Advanced Tips by Region

Improving Your Affordability

Universal strategies:

  • Pay down existing debts to improve your DTI
  • Save for a bigger down payment
  • Work on improving your credit score/financial profile
  • Get a handle on your monthly budget

Country-specific tips:

Sri Lanka

  • Consider government housing schemes if eligible
  • Build relationship with local banks for better rates
  • Factor in monsoon season for property inspections

United States

  • Improve credit score to 740+ for best rates
  • Consider different states for better affordability
  • Look into first-time buyer programs by state

European Union

  • Consider different EU countries for better value
  • Look into energy-efficient home incentives
  • Understand local property tax implications

India

  • Explore different cities for better affordability
  • Consider under-construction properties for better prices
  • Look into employer tie-ups for preferential rates

Frequently Asked Questions

How much of my income should go to housing?

It depends on your country and loan type. DTI limits range from 28% to 43% across different countries and loan programs.

What documentation do I need?

Universal: Income proof, bank statements, credit history Country-specific: Tax returns (US), PAN card (India), National ID requirements vary

How much should I put down?

This varies significantly by country - from 0% (US VA loans) to 30% (some Indian loan types). Don't drain your emergency fund to hit a higher percentage.

Should I get pre-approved?

Absolutely, in every country. It shows sellers you're serious and gives you a realistic budget.

Ready to figure out what you can afford in your country? Use our mortgage affordability calculator above to see:

  • Your maximum home price based on your income, debts, and country-specific loan types
  • How your monthly payment breaks down (automatically converted to your local currency)
  • Visual charts showing your affordability factors
  • Comparisons between different loan types available in your region
  • Country-specific DTI requirements and down payment options

The calculator automatically detects your location and shows relevant loan types for your country, making your home buying journey more accurate and personalized.


Conclusion

Look, buying a house is exciting no matter where you are in the world, but it's also a huge financial commitment. Mortgage systems vary significantly between Sri Lanka, the United States, Europe, and India, so it's crucial to understand your local market.

Use the affordability calculator as a starting point, but remember it's just that - a starting point. Think about your whole financial picture, cultural considerations, and local market conditions, not just what you qualify for.

The key is buying a house you can comfortably afford within your country's system, not the most expensive one you can qualify for. Trust me, you'll sleep better at night knowing you're not house poor, whether you're in Colombo, New York, Berlin, or Mumbai.

💡 This tool provides comprehensive calculations. All results are estimates and should be used for planning purposes only.