Affordability Calculator

Click here to open our free Affordability Calculator (via Google Sheets) - see below for more instructions

For a long time I thought being able to afford to buy a home was just about saving up a 10% deposit and getting a mortgage worth up to 4.5x your annual salary. As I went through the process of buying a house I learnt that these are important factors but miss some key aspects that everyone should consider.

Buying a home has become so expensive that it can feel unrealistic or too daunting to start thinking about. Some people put off working out what they can afford and delay their goals, others go ahead without giving it enough thought and risk having to face tight budgets and hard choices in the future.

That’s why I built the Affordability Calculator: to let anyone thinking about buying a home to make an informed decision about what they can afford.

Get started

• Open the Affordability Calculator (Google Sheets)

• File → Make a Copy (this copy is now yours - make all the edits you want; other people can only access it if you share it with them)

• Update the orange cells with your own numbers to reflect your situation (you can duplicate the sheet at the bottom of the page if you want to create multiple scenarios)

• Review your Affordability Dashboard (grey section, on the right)

The 3 pillars of affordability: cash, borrowing and monthly costs.

There are 3 pillars of affordability to consider when buying a home.

1. Do you have enough cash?

2. Can you borrow enough?

3. Can you afford the monthly costs?

If you search Home buying affordability calculator you’ll mostly see mortgage lenders helping you work out how much they’ll lend you and how much you’ll repay each month. This misses out some key aspects of affordability:

• How much of your own money do you need? It’s more than just your deposit - stamp duty, legal fees, homebuyer surveys, buying furniture once you’re moved in. Everyone’s situation will be different so you can personalise these costs from the defaults in the Affordability Calculator.

• Can you really afford it? You need to avoid becoming House Rich and cash poor: when the costs of repaying your mortgage, maintaining your property and other costs of home ownership (such as heating a property which may well be larger and older than where you previously lived) absorb your income, leaving you with little for anything else. Use the Affordability Calculator to check that you can comfortably afford your new home.

You can use our free Affordability Calculator to quickly work out all three pillars.

• Open the Affordability Calculator (Google Sheets)

• File → Make a Copy (this copy is now yours - make all the edits you want; other people can only access it if you share it with them)

• Update the orange cells with your own numbers to reflect your situation (you can duplicate the sheet at the bottom of the page if you want to create multiple scenarios)

• Review your Affordability Dashboard (grey section, on the right)