Example 1 — Single borrower with debts
- Gross income: 8,000
- Debts: 1,500
- 7%, 25 years, 40% cap
Payment ≈ 1,700
Loan ≈ 240,528
Classic estimate at a comfortable 40% guidance cap.
Borrowing capacity calculator
Enter gross income, current debt payments, and loan assumptions — we'll sketch the payment and loan amount you may handle. A starting point for talking to a lender, not an approval.
We keep the model simple: gross income × affordability cap, minus debts and housing costs → available payment → loan amount (annuity). Living expenses can trim the payment further. Lenders have their own caps and scoring — this is guidance, not a decision.
Result
Enter your numbers and hit Calculate — the result shows up right away.
How results are calculated
Affordable payment = max(0, gross income × target DTI/100 − debts − monthly housing costs).
If living expenses would leave a negative residual, the payment is reduced further (soft residual brake).
Loan amount = inverse annuity at the rate (optionally + buffer) and term. Purchase budget = loan + down payment (when provided).
Cap bands: ~40% comfortable, ~45% stretch — educational guidance only.
How to use the calculator
- Enter monthly gross income and current debt payments.
- Enter assumed rate and term.
- Under Additional options, set the DTI cap, co-borrower, housing costs, down payment, or buffer.
- Compare the estimated payment and loan — guidance, not bank acceptance.
Usage examples
Example 2 — Couple / co-borrower
- Income: 6,000 + 5,000
- Debts: 2,000
- 6.5%, 30 years, 40% cap
Payment ≈ 2,400
Loan ≈ 379,706
Combined income raises capacity despite higher debts.
Example 3 — Purchase budget + housing costs
- Income: 9,000, debts: 500
- Down 80,000; tax/ins/HOA; 2 pp buffer
Payment ≈ 2,150
Loan ≈ 279,615
Budget ≈ 359,615
Housing costs consume headroom; buffer lowers loan amount.
How to interpret the result
- The result shows an indicative instalment or loan level that may fit the income and obligations you entered under simplified assumptions.
- This tool helps estimate the scale of affordability, but it does not replace a lender’s decision, which may depend on more data, risk policy, and income type.
- Treat the number as a starting point for budget planning and offer research, not as a guarantee of financing.
When to choose another tool
- You want only the debt-burden ratio → DTI ratio
- You want the instalment for a specific loan → Loan instalment or Mortgage instalment
- You want to evaluate down payment and LTV → Down payment or LTV
FAQ
How should I read borrowing capacity here?
A quick sketch of how much new monthly payment you may handle — and the loan amount that payment supports at your assumed rate and term. Your lender will still run their own numbers.
Why gross income, not net?
Many lenders measure debt load against gross — that's why this field asks for it. Add a co-borrower under Additional options if you need to.
Why do debts and living expenses matter?
Debts and housing costs eat into the affordability envelope. Living expenses act as a soft brake: if the new payment would leave no room to live on, we trim the payment.
Why might a lender’s result differ?
Lenders use scoring, credit history, their own DTI caps, rate stress buffers, and plenty of criteria this calculator doesn't model.
How is DTI different from borrowing capacity?
DTI is debts ÷ income. Borrowing capacity goes further: from an affordability cap it estimates a max new payment and loan amount.
Where does the default 40% cap come from?
It's a comfortable guidance band. ~45% is often treated as stretch — change the cap under Additional options. These aren't official lender thresholds.
How does down payment affect the result?
Down payment doesn't change the loan amount from the payment — it adds to the estimated purchase budget (loan + down).
Where does the currency come from?
From the page header — same currency as the rest of Calcboxer. Switch it there if you need another one.