1. What is Mortgage Eligibility?

Mortgage eligibility determines how much money you can borrow for a home loan based on your income, existing debts, and lender-specific multipliers. It helps homebuyers understand their purchasing power before applying for a mortgage.

2. How Does the Calculator Work?

The calculator uses the mortgage eligibility formula:

Where:

• \( Income \) — Your gross monthly income
• \( Multiplier \) — Lender-specific multiplier (typically 3-5)
• \( Debts \) — Your monthly debt obligations

Explanation: The multiplier represents how many times your income a lender is willing to loan. Debts are subtracted as they reduce your borrowing capacity.

3. Importance of Eligibility Calculation

Details: Knowing your eligible amount helps in home search by setting realistic price ranges, improves loan approval chances, and assists in financial planning.

4. Using the Calculator

Tips: Enter your gross monthly income (before taxes), the lender's multiplier (ask your bank), and all monthly debt payments (credit cards, car loans, etc.). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's a typical multiplier value?
A: Most lenders use multipliers between 3-5, but this varies by country, lender policies, and current economic conditions.

Q2: Should I include all debts?
A: Yes, include all recurring monthly debt obligations like credit cards, car payments, student loans, and other loans.

Q3: Does this include down payment?
A: No, this calculates the loan amount only. You'll need additional funds for down payment (typically 10-20% of home price).

Q4: What other factors affect eligibility?
A: Credit score, employment history, property type, and loan-to-value ratio also significantly impact mortgage approval.

Q5: Is this calculation exact?
A: This provides an estimate. Actual eligibility may vary based on lender policies and complete financial assessment.