1. What is the Affordability Calculator?

The Property 24 Affordability Calculator helps potential home buyers in Australia determine how much they can afford to spend on a property based on their income, financial commitments, and lending factors.

2. How Does the Calculator Work?

The calculator uses the affordability formula:

Where:

• \( Income \) — Annual or monthly income in Australian dollars
• \( Factor \) — Lender's affordability factor (typically 0.3-0.4)
• \( Debt \) — Existing debt obligations

Explanation: The equation estimates how much you can borrow based on your income after accounting for existing debts and lender criteria.

3. Importance of Affordability Calculation

Details: Calculating affordability helps prevent over-borrowing, ensures realistic property searches, and prepares buyers for mortgage applications.

4. Using the Calculator

Tips: Enter income in AUD, factor as decimal (e.g., 0.35 for 35%), and total debt in AUD. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical affordability factor in Australia?
A: Most Australian lenders use factors between 0.3 and 0.4, meaning they'll lend 30-40% of your income after accounting for debts.

Q2: Should I include all debts in the calculation?
A: Yes, include all recurring debts like credit cards, personal loans, and other mortgages for an accurate assessment.

Q3: Does this include other housing costs?
A: This is a basic calculator. Actual affordability should also consider rates, insurance, maintenance, and other ownership costs.

Q4: How often should I recalculate affordability?
A: Recalculate whenever your income, debts, or interest rates change significantly.

Q5: Is this calculator specific to Australian market conditions?
A: Yes, the factors and calculations are tailored to Australian lending practices and property market norms.