How much house can you afford?

How the home budget is calculated

The cash available for a home loan is take-home income minus existing debt payments, living expenses, home running costs and your saving target. The chosen debt ceiling provides a second limit: income multiplied by that percentage, minus existing debts. The calculator uses the lower limit, with a minimum payment budget of zero.

The financing calculation uses equal monthly payments on a reducing balance. For a monthly interest rate r and n payments, the loan supported by payment M is M × [1 − (1 + r)⁻ⁿ] ÷ r. At zero interest, it is M × n. The indicative property price is that loan divided by the entered financing percentage.

The model assumes the quoted rate stays constant for the selected term. It excludes progressive loan release, financed fees, loan insurance, lender-specific daily interest and cash held in a flexi account. Actual bank quotations may differ.

A salary is only the starting point

In the editable example, take-home income is RM6,000. Existing loans use RM800, living expenses RM1,800, home costs RM300 and the saving target RM600. That leaves RM2,500 for a loan under the cash budget.

The chosen 40% debt ceiling allows RM2,400 for all debts. After the existing RM800 payments, the new loan has RM1,600 available. This lower amount becomes the payment budget. RM1,500 remains after spending and loan payments, including the RM600 saving target.

The 40%, 4.5% rate, 30-year term and 90% financing shown in the form are illustrative inputs. They are not a lender policy or a current rate offer.

What does DSR mean?

Debt service ratio describes how much income goes towards debt payments. This tool divides existing loan payments plus the proposed home payment by entered take-home income. Living costs affect the cash budget, but they are not included in this DSR numerator.

PIDM explains DSR and the difference between eligibility and affordability. Banks may assess qualifying income and debts differently and use different limits. Source checked 14 September 2026.

Common questions before choosing a price

Does this tell me what the bank will approve?

No. It calculates a scenario from your inputs. It does not check age, employment evidence, credit records, the property, bank valuation or any lender’s underwriting requirements.

Can a couple use it?

Yes, as a household budget: include both people’s take-home income, debts and expenses consistently. A joint-loan decision still belongs to the lender.

Does the price include buying costs?

No. The deposit, fees, valuation-related shortfall and renovation need a separate cash plan. The linked upfront cash planner covers those entered amounts.