Loan Affordability Calculator – How Much Can I Borrow?

Before you shop for a home, a car or a personal loan, it helps to know how much a lender will let you borrow, and how much you can comfortably repay. Lenders answer that with the debt-to-income ratio (DTI). This calculator applies the same rule, so you can see the largest payment and the largest loan your income supports.

How to use the loan affordability calculator

Enter your gross monthly income (before tax).
Enter your other monthly debt payments: car loans, student loans, card minimums and support payments.
Choose the maximum DTI to apply.
For a mortgage, enter property tax, insurance and HOA per month. For other loans, enter 0.
Enter the interest rate and the loan term.

The results show the maximum loan amount, the maximum loan payment, the total monthly debt allowed and the total interest at that amount.

How the maximum loan is calculated

First, the DTI limit sets your total allowed debt payments. Your existing debts and housing costs come off the top, and what is left is the most you can pay on the new loan:

allowed debt = gross monthly income × DTI limit
maximum payment = allowed debt − other debts − tax, insurance and HOA
maximum loan = payment × (1 − (1 + r)^−n) ÷ r

r is the monthly rate and n is the number of payments.

Worked example

You earn $8,000 a month before tax and pay $600 a month on other debts. You’re looking at a mortgage at 6.5% for 30 years, with $450 a month in tax and insurance.

Allowed debt at 43%: 8,000 × 0.43 = $3,440.
Maximum mortgage payment: 3,440 − 600 − 450 = $2,390.
Maximum loan: $2,390 a month for 360 months at 6.5% = $378,123.86.
Total interest over 30 years at that amount: $482,276.14.

At a more conservative 36%, the same income supports a loan of about $289,526.

Ways to borrow more, or borrow more comfortably

Pay down other debts first. Every $100 a month of debt you clear adds about $15,800 to the mortgage you can afford at 6.5% over 30 years.
Improve your credit. A lower rate raises the loan your payment supports.
Increase your down payment. You borrow less for the same home, and may avoid PMI.
Add a co-borrower’s income, if they will share the responsibility.
Compare loan programs. FHA and VA loans may allow higher ratios than conventional loans, but they have their own fees and insurance costs, so compare the full monthly cost.

To see the full monthly cost of a specific home, use the mortgage calculator. For a car budget, use the car affordability calculator.

Common mistakes

Using take-home pay. DTI uses gross income, before tax.
Leaving out tax and insurance. For a mortgage, they count toward the DTI limit.
Forgetting card minimums. Even small minimum payments reduce how much you can borrow.
Treating the maximum as a target. A payment well below the limit leaves room for savings and surprises.

Frequently asked questions

How do lenders decide how much I can borrow?

Mainly with your debt-to-income ratio (DTI), which is your monthly debt payments, including the new loan, divided by your gross monthly income. Many mortgage lenders cap DTI at 43%, some FHA and VA loans allow up to 50%, and 36% is a common conservative target.

What counts as debt in the debt-to-income ratio?

Minimum payments on credit cards, car loans, student loans, personal loans, child support or alimony, and the new loan's payment, including property tax, insurance and HOA dues for a mortgage. Everyday bills such as utilities, phone and groceries are not counted.

How is income counted if I'm self-employed?

Lenders usually average your net self-employment income from the last two tax returns, then add back non-cash deductions such as depreciation. Enter that average ÷ 12 as your monthly income.

Should I borrow the maximum I qualify for?

Usually not. The maximum is what a lender will approve, not what fits your goals. Leave room for savings, emergencies and rising costs such as insurance and taxes.

Last updated November 2, 2026 · By the ZTool team