π Calculation Method
β’ Affordable Price = Equity + Loan Capacity
β’ Total Savings = Current Savings + (Monthly Savings Γ Period)
β’ Loan Capacity = Lower of DTI-based and LTV limit
β’ DTI (Debt-to-Income) = (Annual Loan Payment / Annual Income) Γ 100
β’ LTV (Loan-to-Value) = Percentage of house price
π‘ Home Ownership Tips
β’ Prepare 20-30% of house price as equity
β’ Keep DTI within 40% for stability
β’ Monthly payment varies greatly by interest rate and period
β’ Consider additional costs: taxes, fees, commission
β οΈ Notes
β’ Actual loan capacity depends on credit score, income stability
β’ LTV, DTI regulations vary by policy and region
β’ This calculator is for reference - consult financial institutions
β’ Consider maintenance costs and management fees
π‘ Home Affordability Calculator
Calculate affordable house price based on income and assets, and plan for home ownership.
How is affordable house price calculated?
The affordable house price is the sum of your equity (total savings) and your loan capacity. Total savings is calculated by adding your current savings to your monthly savings multiplied by the saving period. Loan capacity is set conservatively as the lower of the DTI-based limit (from annual income and DTI ratio) and the LTV-based limit (from house price and LTV ratio). Combining this equity and loan capacity estimates the upper bound of the house price you can realistically purchase.
Understanding DTI and LTV
DTI (Debt-to-Income) is the ratio of annual loan repayment to annual income, limiting the loan size your income can support. LTV (Loan-to-Value) is the loanable percentage of the house price, setting the limit based on collateral value. Both rules apply simultaneously, and the actual limit follows the stricter (lower) of the two. DTI and LTV limits can vary by government policy and regulated-area designation, so check the latest standards.
Planning your home purchase budget
For stable home ownership, it is recommended to prepare 20-30% or more of the house price as equity. Keeping DTI within 40% prevents an excessive monthly repayment burden. You should also account for additional costs such as acquisition tax, registration tax, brokerage fees, moving, and interior costs, as well as ongoing costs like management fees and property tax after moving in, to build an accurate budget. Allow for interest-rate changes by keeping a comfortable repayment plan.