Work backwards from a comfortable monthly payment to the largest loan you could take at a given rate and term.
How the Loan Affordability Calculator works
This works backwards from a comfortable monthly payment to the largest loan you could take, using the amortization formula solved for principal at a given rate and term.
Example calculation
A $1,500 monthly budget at 6.5% over 30 years supports a loan of roughly $237,000 in principal.
Tips for using the Loan Affordability Calculator
- Leave room for taxes, insurance, maintenance and emergencies.
- Borrowing your maximum leaves no safety margin.
- Lenders also weigh credit score and debt-to-income ratio.
Loan Affordability Calculator — frequently asked questions
- Should I borrow the maximum?
- Rarely — leave room for taxes, insurance, maintenance and emergencies.
- Does this guarantee approval?
- No — lenders also weigh credit score, income and debt-to-income ratio.
- Does a high affordability mean I'll be approved?
- No — approval also depends on income, credit and DTI, not just the payment.
- Should I borrow the maximum shown?
- Rarely; a payment you can sustain through job or rate changes is wiser.
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