It depends on several factors such as your income, existing debts, credit rating, etc. Most lenders will take all your fixed costs such as mortgage payments, property taxes, credit card debt, auto and other loans, etc. and add them all up. They will then divide this figure by your income to come up with a percentage or ratio. A common acceptable ratio of expenses to income is about 35 percent, thus leaving you with enough money to pay your other monthly expenses such as food, clothing, energy, and entertainment. If the ratio gets to high, then the lender figures you might not be able to make your mortgage payment. If the ratio is low then lenders may be quite happy to loan you money. Get all your facts and figures together and visit your local bank to see approximately how large a mortgage they might approve.
Of course, just because a bank will loan you the money doesn’t mean that you can afford to pay it. That is a decision you must make. For example, how much are you paying in rent right now? You could probably pay the same amount on a mortgage without much problem. Do you have some cash on hand to pay for home repairs that might come up? Do you have enough money on hand to make the mortgage payments if you lose your job?
Use the below calculator to receive estimate how big of a mortgage you can afford: