Quick answer: With 25,000 a month income, 2,000 in other payments and a 33% limit, the home payment can be 6,250; at 5% over 25 years that supports a 1,069,125 loan, so with 200,000 down you can afford about 1,269,125.
How it's calculated
Maximum payment = monthly income × debt-to-income limit − your other monthly debt payments. The default 33% matches SAMA's cap on consumer-finance repayments deducted from salary (33.33% of gross salary), a cautious starting point. With home finance, SAMA's Responsible Lending Principles allow total obligations of up to 55% or 65% of income depending on salary, and UAE Central Bank rules cap all instalments at 50% of gross salary and regular income. Your bank applies its own limit within these.
The loan that payment supports is its present value: P = M·(1 − (1 + r)^−n) ÷ r, with r the annual rate ÷ 12 and n the number of months. The price you can afford is that loan plus your down payment.
Leave room for the costs that come with buying (registration, agency and valuation fees) and for service charges. Check the payment for a chosen price with the mortgage calculator and your current ratio with the debt-to-income calculator. Property tax, home insurance and mortgage insurance (PMI), common in the US, are not included; taking them out of the payment gives a lower price.
Worked examples
- 25,000 income, 2,000 debts, 33%, 5%, 25 years, 200,000 down: M = 6,250 → price 1,269,125
- Same with a 50% limit: M = 10,500 → price 1,996,130
Frequently asked questions
What debt-to-income limit should I use?
Use your bank's. In Saudi Arabia consumer-finance repayments are limited to 33.33% of gross salary, with higher totals (55% or 65% of income, depending on salary) when home finance is included; the UAE caps all instalments at 50% of gross salary. US lenders often look at 36% to 43%.
Does this include the down payment rules?
No. Lenders also cap the loan-to-value ratio; see the down payment calculator.
Should I borrow the maximum?
Not necessarily. A payment below your limit leaves room for savings, rate rises on variable finance and unexpected costs.
Does a longer term let me afford more?
Yes, because the same payment supports a larger loan, but you pay much more interest overall.
How does the rate affect what I can afford?
A higher rate means more of each payment goes to interest, so the same payment supports a smaller loan. Try a higher rate to see how much room you have.
What other costs should I plan for?
Purchase fees, furniture, service charges, maintenance and insurance. Keep some savings after the purchase rather than spending your full down payment budget.