How do lenders determine how much I can borrow?

Lenders use your debt-to-income (DTI) ratio, credit score, income stability, and existing debts to determine borrowing capacity. Generally, your total monthly debts including the new loan shouldn't exceed 36-43% of your gross monthly income.

What is debt-to-income ratio?

Debt-to-income (DTI) ratio is the percentage of your gross monthly income that goes toward paying debts. Front-end DTI covers housing costs only (ideally under 28%), while back-end DTI includes all debts (ideally under 36%).

How much house can I afford with my salary?

A common rule is that you can afford a home priced at 2.5 to 3 times your annual income. However, this varies based on your down payment, debts, interest rates, and local property taxes and insurance costs.

What factors affect my borrowing capacity?

Key factors include your gross income, existing monthly debts, credit score, employment history, down payment amount, interest rates, and the loan term. Lower debts and higher income increase your borrowing capacity.

How Much Can I Borrow Calculator

Calculate your maximum borrowing capacity based on your income, expenses, and debt-to-income ratio.

Borrowing Capacity Calculator

Enter your financial details to find out how much you can afford to borrow

Income Details

Annual Gross Income ($) Your yearly income before taxes

Additional Annual Income ($) Bonus, rental income, etc.

Co-Borrower Income ($) Spouse or co-applicant income

Income Type Primary income source

Monthly Debts & Expenses

Car Payment ($) Monthly auto loan payment

Credit Card Minimum ($) Total minimum payments

Student Loans ($) Monthly student loan payment

Other Monthly Debts ($) Personal loans, alimony, etc.

Current Rent/Mortgage ($) Current monthly housing cost

Child Support/Alimony ($) Monthly obligations

Loan Parameters

Loan Type Type of loan you're seeking

Interest Rate (%) Expected annual interest rate

Loan Term (Years) Repayment period

Target DTI Ratio (%) Debt-to-income target

Down Payment ($) Available for down payment

Property Tax Rate (%) Annual property tax rate

Home Insurance ($/year) Annual homeowners insurance

Credit Score Range Affects rate qualification

Your Borrowing Capacity

Maximum Loan Amount

Based on your DTI

Max Purchase Price

Including down payment

Monthly Payment

Principal & Interest

Available Budget

For housing payment

Debt-to-Income Analysis

Current DTI

Without new loan

Projected DTI

With new loan

Target DTI

36%

Your selected limit

0% 28% (Conservative) 36% (Standard) 43% (Max) 50%+

Affordability Assessment

Comfortable Stretched Risky

Good

Monthly Budget Allocation

Housing (0%)

Other Debts (0%)

Available (0%)

Monthly Payment Breakdown

Gross Monthly Income $0

Existing Monthly Debts -$0

                    Available for Housing
                    $0
                

Principal & Interest $0

Property Tax $0

Insurance $0

                    Total Housing Payment
                    $0
                

Borrowing Scenarios

DTI Level	Max Loan	Monthly Payment	Total Cost	Status

Tips to Increase Borrowing Capacity

How We Calculate

Max Monthly Payment = (Monthly Income x Target DTI%) - Existing Debts

Understanding Your Borrowing Capacity

What is DTI Ratio?

Debt-to-Income (DTI) ratio compares your monthly debt payments to your gross monthly income. Lenders use this to assess your ability to manage monthly payments. Lower DTI means better borrowing capacity and often better loan terms.

DTI Guidelines

Under 28%: Excellent - easily approved
28-36%: Good - standard qualification
36-43%: Acceptable - may need good credit
43-50%: High risk - limited options
Over 50%: Very difficult to qualify

Factors That Affect Borrowing

Credit score and history
Employment stability
Down payment amount
Type of loan program
Current interest rates
Property type and location

Improving Your Capacity

Pay down existing debts
Increase your income
Save a larger down payment
Improve your credit score
Consider a co-borrower
Choose a longer loan term