KLOORAHow Much House Can I Afford? A Mortgage Affordability Guide
Published 1 November 2026 by Kloora Tools
Quick answer: a common guide is the 28/36 rule: spend no more than 28 percent of gross monthly income on housing and no more than 36 percent on all debt payments. With a gross income of 200,000 a month that means a housing payment of about 56,000 and total debt payments up to 72,000. At a 10 percent rate over 20 years, 56,000 a month supports a loan of about 5.8 million. Test your own figures with the free Mortgage Calculator.
What is the 28/36 rule?
The front-end ratio (28 percent) limits your housing payment. The back-end ratio (36 percent) limits all monthly debt: housing, car loans, credit cards and personal loans. Lenders use similar ratios, though the numbers differ by country and bank. The rule is a safe starting point, not a promise that a bank will lend.
How do you calculate the loan you can afford?
- Take your gross monthly income. Example: 200,000.
- Housing limit: 200,000 x 0.28 = 56,000.
- Total debt limit: 200,000 x 0.36 = 72,000. If you already pay 20,000 on a car loan, only 52,000 is left for housing, so use the smaller figure.
- Divide the housing payment by the payment factor for your rate and term.
At 10 percent over 20 years the payment is about 9,650 for each 1,000,000 borrowed. So 52,000 supports roughly 52,000 / 9,650 x 1,000,000 = 5.39 million. Without the car loan, 56,000 supports about 5.8 million.
| Rate | Term | Payment per 1,000,000 |
|---|---|---|
| 10% | 20 years | 9,650 |
| 10% | 15 years | 10,746 |
| 12% | 20 years | 11,011 |
| 8% | 25 years | 7,718 |
Rates here are examples. Use your lender's quote.
How much down payment do you need?
Lenders commonly ask for 10 to 30 percent of the property price. A higher down payment cuts the loan, the interest and sometimes the rate. If the house costs 8 million and you pay 25 percent (2 million), you borrow 6 million, which is more than the 5.8 million limit above. You would need either a cheaper home, a longer term or a higher down payment.
What costs do buyers forget?
- Transfer and registration fees and stamp duty
- Legal and valuation fees charged by the bank
- Property insurance
- Maintenance and utilities, which rise with a bigger home
- Moving and furnishing
- Property tax
Keep a cushion of 3 to 5 percent of the price for the one-time costs.
Should you choose a longer or shorter term?
A longer term lowers the payment but increases total interest. At 10 percent on 5 million, a 20 year loan pays about 48,251 a month and 6.58 million in interest. A 15 year loan costs 53,730 a month but only about 4.67 million in interest. If the payment feels tight, take the longer term and prepay when you can.
How can you improve affordability?
- Pay off small debts first to lift the back-end ratio.
- Build a bigger down payment.
- Compare several lenders and read the fee schedule.
- Consider a smaller or more distant home now and upgrade later.
Try it now
Open the Mortgage Calculator and try different prices, rates and terms. For amortisation details use the EMI Calculator.
Frequently asked questions
What is the 28/36 rule for a mortgage?
Spend no more than 28 percent of gross income on housing and no more than 36 percent on all debt payments.
How much mortgage can I afford on 200,000 a month?
By the 28 percent rule your housing payment is about 56,000, which supports roughly a 5.8 million loan at 10 percent over 20 years.
How much down payment do I need for a house?
Lenders often require 10 to 30 percent of the price. A larger down payment lowers your loan and interest.
Is a 15 year or 20 year mortgage better?
A 15 year loan costs more each month but much less in total interest. Choose what your budget can sustain.
What other costs should I budget for when buying a home?
Fees, stamp duty, insurance, maintenance, utilities, moving costs and property tax.
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