Borrowing Power Calculator
See roughly how much a lender might let you borrow from your income and other debts.
About the Borrowing Power Calculator
Enter your gross yearly income, your other monthly debt payments, the lender's debt-to-income limit, the mortgage rate and term, and an allowance for property tax and insurance. The calculator shows the monthly housing budget the limit leaves and the loan it supports.
Lenders cap total monthly debt (including the new mortgage, taxes and insurance) at a share of gross income, commonly 36–43% in the US. Credit score, deposit and the lender's stress test also matter.
The formula
Loan = (income × DTI − other debts) ÷ (payment factor + tax and insurance factor)
Worked example
Income 90,000 a year, 400 of other debts, 43% DTI, 6.5% over 30 years
- Monthly income: 7,500; 43% of it is 3,225
- Minus other debts: 2,825 a month for housing
- That supports a loan of about 373,150
Things to keep in mind
- An estimate, not an offer: lenders also check credit history, savings and employment.
- Doesn't include the down payment; add it to the loan to see a possible price.
Questions people ask
Is the maximum affordable?
Not necessarily; leave room for saving and emergencies.
What is a stress test?
Many lenders check you could pay at a higher rate.
How do I borrow more?
Pay down other debts first: each 100 a month of debt removed adds roughly 13,000 to borrowing at these rates.