Last reviewed: October 2026 · By the MortgageCompass Editorial Team · How we research
For most households, a comfortable home price is one where the mortgage, property tax and insurance take no more than about 28% of gross income, and all debts together no more than about 36%. On a household income of 100,000 with 500 a month of other debts, a 40,000 deposit and a 6.5% rate, that points to a home of roughly 345,000.
Lenders, however, may approve far more, and each country measures affordability differently. The same household could be offered anything from about 345,000 to 640,000 depending on which rule is applied. The comparator below shows all four side by side, so you can see the range and decide where you want to sit within it.
Affordability comparator: one household, four countries’ rules
Enter your figures once and see the maximum home price each lending rule would suggest.
Simplified estimates based on published lending rules, for illustration only. Real lenders also look at your credit history, living costs, employment and the property. Not financial advice.
How each country measures affordability
Every lender asks the same basic question: can you keep paying if things get harder? They just measure it in different ways. These are the main rules behind the comparator:
| Country | Main test | Key limits |
|---|---|---|
| United States | Debt-to-income ratio (DTI) | 28/36 is a widely used guideline. Fannie Mae allows total DTI up to 36% for manually underwritten loans, up to 45% with strong credit and reserves, and up to 50% through its automated system. |
| United Kingdom | Income multiple plus an affordability assessment | Loans of 4.5 times income or more are “high loan-to-income” and limited across the market, so most lenders stop around 4.5 times. |
| Canada | Debt service ratios at a stress-tested rate | Insured mortgages: housing costs (GDS) up to 39% and total debts (TDS) up to 44% of gross income, calculated at the higher of your rate plus 2 points or 5.25%. |
| Australia | Serviceability after living expenses | Repayments are tested at a rate 3 points above the actual rate. Since February 2026, banks can make only a limited share of new loans at 6 times income or more. |
Two things follow from this. First, the UK and Australian figures in the comparator are ceilings, not likely offers: lenders in both countries also deduct your actual living costs, which usually brings the answer down. Australian buyers can get a closer estimate with our borrowing power calculator. Second, Canada’s stress test is the strictest when rates are high, because you must qualify at a rate 2 points above the one you will actually pay. Our guide to the Canadian mortgage stress test explains it in detail.
What a lender approves vs what you can live with
All of these rules use gross income, before tax. Your monthly budget runs on take-home pay. A payment that is 28% of gross income can easily be 35% to 40% of what reaches your bank account, and the lender maximum can be more than half of it.
Before you settle on a price, run this quick check with your own numbers:
- Take your monthly take-home pay.
- Subtract the full housing cost: mortgage payment, property tax, insurance, any HOA or service charges, and an allowance for repairs.
- Subtract your other fixed costs: debt payments, childcare, transport, food, utilities and savings.
- If what is left would not cover an unexpected bill of a few thousand, the price is too high for comfort, whatever the lender says.
It also helps to keep an emergency fund after paying the deposit and closing costs. Buying with every saving you have leaves no room for a broken boiler, a job change or a rate rise at renewal.
Interest rates move the answer more than income
Using the same household and the 28/36 guideline, the monthly budget for principal and interest stays fixed at about 1,933. What changes is how much loan that payment can support over 30 years:
- At 5.5%: a loan of about 340,500
- At 6.5%: a loan of about 305,900
- At 7.5%: a loan of about 276,500
A two-point rise in rates cuts the budget by about 64,000, roughly the same effect as losing a fifth of the household income. In the US, the average 30-year fixed rate in Freddie Mac’s weekly survey was above 7% in October 2026, so it is worth running the comparator at the rate you are actually quoted, not at last year’s level. If your rate will be reset at renewal, as is normal in the UK, Canada and Australia, try a rate 1 to 2 points higher as well.
The cash you need besides the deposit
Affordability is not only about the monthly payment. Before setting your price range, add up the upfront costs:
- Closing or completion costs: legal and conveyancing fees, valuation, lender fees and title insurance where it applies.
- Property transfer taxes: Stamp Duty in England and Northern Ireland, land transfer tax in most Canadian provinces and stamp duty in Australian states. UK buyers can estimate theirs with our Stamp Duty calculator.
- Mortgage insurance: often required with a small deposit, either as a monthly cost or added to the loan.
- Moving and setting up: removals, furniture and the first repairs.
Our guide to how much down payment you need covers minimum deposits by loan type and how they change your monthly cost.
How to afford more without stretching
- Pay down other debts first. In the US and Canadian tests, every 100 of monthly debt payments you clear adds roughly 100 a month to what the rules allow for housing.
- Improve your credit score. A better score can mean a lower rate, and as the example above shows, rates have a large effect. See what credit score you need to buy a house.
- Save a larger deposit. It raises the price directly and can remove the need for mortgage insurance.
- Be careful with longer terms. A longer loan lowers the payment but greatly increases the total interest you pay.
Frequently asked questions
How much house can I afford on a 100,000 salary?
With 500 a month of other debts, a 40,000 deposit, a 6.5% rate and 400 a month for property tax and insurance, the 28/36 guideline points to about 345,000. A lender could approve considerably more. Your deposit, other debts and the rate you are offered change the answer more than the salary alone, so use the comparator with your own figures.
Is the 28/36 rule a legal limit?
No. It is a long-standing guideline for a comfortable budget. US lenders can approve higher ratios depending on the loan program, your credit score and your savings. It is still a sensible starting point if you want room in your budget.
Do lenders use gross or net income?
The ratios in the US, Canada and the UK income multiple are based on gross income. Australian lenders and UK affordability assessments also look at your actual spending. That is why it pays to check the payment against your take-home pay yourself.
Should I get pre-approved before house hunting?
Yes. A pre-approval, or agreement in principle in the UK, shows what a lender is likely to offer and makes your offer more credible to sellers. Treat the amount as a ceiling, not a target.
Sources
- Fannie Mae Selling Guide B3-6-02: Debt-to-income ratios
- FCA: Loan-to-income flow limit guidance (FG25/3)
- CMHC: Underwriting criteria (GDS 39%, TDS 44%)
- OSFI: Minimum qualifying rate for uninsured mortgages
- APRA: Activation of debt-to-income limits
- Freddie Mac: Primary Mortgage Market Survey
This guide is for informational purposes only and is not financial advice. Examples are illustrations. Lending rules change and every lender applies its own criteria, so confirm your borrowing limit with a licensed lender or broker in your country.