An affordability ratio is a measure used to determine how much of a loan or mortgage payment an individual can comfortably make based on their income and other financial obligations. The calculation typically involves taking into account housing expenses, such as principal, interest, taxes, insurance, and association fees, along with other debts like credit cards, car payments, student loans or child support. Lenders use this ratio to assess the borrower's ability to repay their loan on time and in full, helping them determine whether they should approve a mortgage application or not. The higher the affordability ratio, the more financially secure an individual is deemed to be, with ratios typically capped at around 28% for housing expenses.