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How much can I borrow?

Enter your income, debt-to-income limit, rate and term: the calculator works backward from the payment to show how much you can borrow and the top price of a home or car.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026
Loan

Home: 15- to 30-year terms. Car: 36 to 72 months at a higher rate. Lenders also look at your credit history and the value of what you buy.

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Based on your incomeMaximum purchase price
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How much you can borrow by term

Loan amount with the same maximum payment over different terms, for both payment types.

Tap the chart to see the values.

Maximum price at other rates and limits

Rows: debt-to-income limit. Columns: annual interest rate. Same term, payment type and down payment.

Next step

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The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Maximum payment = income × DTI limit − other debts − taxes and insurance
Monthly rate: nominal annual ÷ 12, or effective (1 + annual)^(1/12) − 1
Fixed payment: loan = payment × [1 − (1 + i)^−n] ÷ i
Constant principal: loan = first payment ÷ (1/n + i); total interest = loan × i × (n + 1) ÷ 2
Maximum price = loan amount + down payment

Assumptions and limits

  • Fixed rate for the whole term, no balance indexing and no fees; taxes and insurance entered as a constant monthly amount.
  • The limit is applied to gross income; actual approval depends on credit review, appraisal and each lender’s rules.

Official sources and references

Frequently asked questions

How much of my income can go to the payment?

Many U.S. lenders use a front-end ratio around 28% of gross income for housing and a back-end ratio around 36% for all debts, with some loan programs allowing more. Those are ceilings, not goals: a lower ratio leaves room for maintenance, savings and the unexpected.

How do I read the result of the page’s example?

With a $7,000 income, a 36% limit, $500 of other debts and $400 of taxes and insurance, the maximum payment is $1,620. At 6.5% APR over 360 months with a fixed payment, it supports a loan of about $256,000; with $60,000 down, the home can cost up to about $316,000.

Why does constant principal borrow less than a fixed payment?

Because with constant principal the first payment is the largest: it covers the fixed principal plus interest on the whole balance. Since that first payment has to fit your income, the loan amount is smaller. In exchange, payments fall over time and total interest is lower.

Which rate should I use?

Use the note rate from a lender’s loan estimate; U.S. mortgage and auto rates are nominal annual rates, so keep “Nominal / APR (÷ 12)”. The APR shown on disclosures includes some fees and is a bit higher than the note rate. Your rate depends on your credit score, down payment and loan type.

Do I need 20% down?

Not always: many loans allow smaller down payments, but below 20% you usually pay mortgage insurance, which uses part of your monthly limit. Keep cash for closing costs and moving as well.

What does the calculator leave out?

Credit score, lender overlays, closing costs, changes in property taxes and insurance, adjustable rates and loan limits. The result is an income-based ceiling; actual approval depends on the lender.

When should I talk to a professional?

Before committing to a long loan, get loan estimates from at least three lenders and compare them line by line. A HUD-approved housing counselor or a fee-only financial planner can help you check whether the payment fits your budget.

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How much can I borrow on my income

Lenders do not start from the price of the home or car: they start from the payment your income can carry. Then they work out how much that payment can repay at the loan’s rate and term. Add your down payment and you get the maximum purchase price.

Step 1: the maximum payment

Many U.S. lenders look at two debt-to-income ratios: the housing payment against gross income (a common guideline is 28%) and all debt payments against gross income (often 36%, sometimes up to 43% or more). From the limit, subtract the debts you already pay and the property taxes and insurance. With a $7,000 income and a 36% limit, that is $2,520; minus $500 of other debts and $400 of taxes and insurance, $1,620 is left for principal and interest.

Step 2: how much that payment can borrow

With a fixed payment, the loan amount is the present value of the payments. With constant principal, the first payment is the largest, so the same income borrows less but pays less interest overall.

Example: $1,620 a month, 6.5% APR, 30 yearsLoan amount
Fixed paymentabout $256,000
Constant principalabout $198,000

Step 3: the down payment

The maximum price is the loan amount plus your down payment. Putting down less than 20% on a home usually means paying mortgage insurance, which uses part of your monthly limit. Keep cash for closing costs as well.

Be careful

Qualifying for a loan is not the same as affording it. Count maintenance, utilities and an emergency fund before committing to a long payment. Very long terms add little buying power and a lot of interest.