How to Work Out What House You Can Afford

Buying a home is four calculations, and people almost always do them in the wrong order — falling for a house, then working backwards to justify the payment.

Done forwards, it looks like this.

These tools estimate; they do not advise. A mortgage is the largest financial commitment most people make, and a lender, a broker or a qualified adviser has context a calculator does not.

1. What will they actually lend?

The Mortgage Affordability Calculator is built on the 28/36 rule, and the first thing worth knowing is that the 28/36 rule is a lender convention, not a law. Different lenders apply different thresholds and treat income differently.

It also surfaces something genuinely non-obvious about existing debt: it costs you nothing until it crosses the threshold — and then $13,065 of house per $100 a month.

That is a step, not a slope. A car payment may be entirely free in affordability terms, right up until it pushes you over the back-end ratio, at which point every hundred dollars is thirteen thousand dollars of house. This is why "should I pay off the car before applying?" has no general answer — it depends entirely on which side of the line you are on.

Run it both ways before deciding.

2. What does it cost per month — and in total?

The Mortgage Payment Calculator gives the monthly payment with the total interest beside it, deliberately, because on a 30-year loan the interest is usually larger than people expect.

Look at both numbers. The monthly payment is what you live with; the total is what you are agreeing to. Every conversation about mortgages happens in monthly terms, which makes a longer term sound like a smaller commitment when it is a larger one.

3. Should you buy at all?

The Rent vs Buy Calculator is the most honest tool in this group, because of what it concludes: on realistic numbers the two land within a few thousand dollars over seven years — and the whole margin is an appreciation rate nobody can predict.

That is the real answer to a question people expect to have a winner. Over a typical holding period the two options are close enough that the deciding variable is the one variable that is a guess.

Which means the decision is properly made on the things the calculator cannot weigh: how long you will stay, how much you want to be able to move, whether you want to be the person who fixes the roof. Anyone confidently telling you renting is throwing money away is not doing the arithmetic.

4. Then the move

The Moving Box Calculator is a smaller thing, and it is honest about its own limits: published box counts vary threefold, so treat the count as a range.

What is not a guess: at 25 lb per cubic foot, a box of books must stay under 2 cubic feet. That is a physical limit, not a preference — a large box filled with books is beyond what the box and your back are designed for, and it is the standard way people hurt themselves on moving day.

The short version

1. Check affordability before looking — and run it with and without paying off other debts.
2. Read the total interest, not just the monthly payment.
3. Rent vs buy is closer than either side claims. Decide on the non-financial factors.
4. Books go in small boxes. Under 2 cubic feet.

Each tool has a printable — the affordability sheet is worth filling in before you talk to a lender, so you arrive with your own numbers rather than only theirs.