How much you can borrow for a mortgage depends on your income, existing debts and which country you're in. Lenders use different rules worldwide — here is what matters in each major market.
United States — Debt-to-Income Ratio
US lenders use two DTI ratios. The front-end ratio (housing expenses ÷ gross monthly income) should not exceed 28%. The back-end ratio (all monthly debts including housing ÷ gross monthly income) should not exceed 36–43%. FHA loans allow up to 50% back-end DTI with compensating factors.
Example: $7,000/month gross income. Max housing payment (28%) = $1,960/month. At 6.5% over 30 years, that supports a loan of approximately $310,000.
United Kingdom — Income Multiples
UK lenders typically offer 4–4.5× annual gross income for a single applicant, 3.5–4× joint income. Some lenders offer up to 5× for high earners (£75,000+). The Financial Conduct Authority (FCA) requires lenders to stress-test affordability at 3% above the standard variable rate.
Australia — Serviceability Buffer
APRA requires Australian lenders to assess affordability at 3% above the loan's interest rate. Banks also use the Household Expenditure Measure (HEM) to estimate living costs. Most lenders will advance 5–6× gross income but this varies considerably based on other debts and expenses.
New Zealand — DTI Cap
The Reserve Bank of New Zealand introduced a DTI cap from July 2024: owner-occupied lending capped at 6× income. Most first home buyers in Auckland need a 20% deposit. KiwiSaver and HomeStart grants can help with the deposit.
Canada — Stress Test
Canada's mortgage stress test requires qualifying at the higher of 5.25% or the contract rate + 2%. The GDS ratio (housing costs ÷ income) should be below 39% and TDS ratio (all debts ÷ income) below 44%.
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