Loan Affordability Calculator

Use our free loan affordability calculator to determine how much you can borrow based on your income, existing debts, and the lender's maximum DTI ratio. See the maximum loan and property value you can afford.

Financial

Currency

Annual Income

Monthly Debt Payments

Annual Interest Rate (%)

Loan Term (years)

years

Maximum DTI Ratio (%)

Down Payment (%)

Formula

Knowing how much you can afford before shopping for a loan helps you focus on the right price range. This calculator uses your income, existing debts, and the lender's maximum DTI ratio to determine your borrowing power.

Max Loan = Available Payment x [(1+r)^n - 1] / [r(1+r)^n]

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter your annual gross income.
2Enter your total monthly debt payments (credit cards, car loans, student loans).
3Enter your expected interest rate and loan term.
4Set the maximum DTI ratio the lender allows (typically 36-43%).
5Optionally include a down payment percentage to estimate the maximum property value.

Examples

$85,000 income, $500/mo debts, 6.5%, 30yr, 36% DTI

1.Monthly income = $85,000 / 12 = $7,083.33
2.Max DTI payment = $7,083.33 x 36% = $2,550
3.Available for loan = $2,550 - $500 = $2,050
4.Max loan affordable ≈ $323,800

Result: $323,800

Frequently Asked Questions

Debt-to-Income ratio is your total monthly debt payments divided by your gross monthly income. Lenders use it to assess your ability to manage payments.

Most lenders prefer a DTI ratio of 36% or lower. Some loan programs allow up to 43-50%.

No, this calculator focuses on the maximum loan principal. Property taxes and insurance would reduce the amount available for the loan payment.

Yes, getting pre-approved gives you a firm understanding of your budget and shows sellers you are a serious buyer.

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CalculateMe Team

Last updated: 2026-07-15

How It Works

1Enter your annual gross income.

2Enter your total monthly debt payments (credit cards, car loans, student loans).

3Enter your expected interest rate and loan term.

4Set the maximum DTI ratio the lender allows (typically 36-43%).

5Optionally include a down payment percentage to estimate the maximum property value.

Frequently Asked Questions

Debt-to-Income ratio is your total monthly debt payments divided by your gross monthly income. Lenders use it to assess your ability to manage payments.

Most lenders prefer a DTI ratio of 36% or lower. Some loan programs allow up to 43-50%.

No, this calculator focuses on the maximum loan principal. Property taxes and insurance would reduce the amount available for the loan payment.

Yes, getting pre-approved gives you a firm understanding of your budget and shows sellers you are a serious buyer.

Loan Affordability Calculator

Formula

How It Works

Examples

$85,000 income, $500/mo debts, 6.5%, 30yr, 36% DTI

Frequently Asked Questions

What is DTI ratio?

What is a good DTI ratio?

Does this include property taxes and insurance?

Should I get pre-approved?

Related Calculators

Related Articles

Loan Affordability Calculator

Formula

How It Works

Examples

$85,000 income, $500/mo debts, 6.5%, 30yr, 36% DTI

Frequently Asked Questions

What is DTI ratio?

What is a good DTI ratio?

Does this include property taxes and insurance?

Should I get pre-approved?

Related Calculators

Related Articles