Example 1
- 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
Type monthly gross income, current debts, an assumed rate, and a term. The calculator builds an available payment from a DTI cap, debt to income, then inverts an annuity. At 8,000, 1,500, 7%, 25 years, and 40% the payment is 1,700 and the loan is about 240,528.
Income × DTI cap minus debts and housing, then an annuity amount. Guidance, not a credit decision and not full mortgage underwriting. Ratio only: DTI.
Result
Enter your numbers and hit Calculate - the result shows up right away.
How results are calculated
Borrowing capacity on this page starts from Monthly gross income times Target affordability cap / DTI (%). DTI is debt to income. At 8,000 and 40% the cap is 3,200. Minus Current monthly debt payments of 1,500, the available payment is 1,700. An inverted annuity, the equal installment, at 7% for 25 years is about 240,528. With incomes 6,000 plus 5,000 from a co-borrower, debts 2,000, 6.5%, and 30 years, the payment is 2,400 and the loan about 379,706.
People want to hear how much they can get. The calculator does not know a score, a history, or a minimum down payment from an offer. Housing costs come off the cap before the annuity is inverted. At 9,000, debts 500, a 40% cap, tax 6,000, insurance 2,400, and HOA 250, the available payment falls to 2,150, because 3,600 minus 500 minus 950 leaves 2,150. A Stress / buffer on rate of 2 pp lifts 6.5% to 8.5% when the loan is computed, so the loan is about 279,615. A Down payment of 80,000 adds into a purchase budget of about 359,615, not into the payment.
Required fields are Monthly gross income, Current monthly debt payments, Assumed annual rate (%), Assumed term (years), and Target affordability cap / DTI (%), default 40. Optional: Co-borrower monthly gross income, Monthly living expenses, Other monthly housing, Down payment, Annual property tax, Annual home insurance, Monthly HOA / admin fee, and Stress / buffer on rate (pp). Living expenses can trim the payment further when leftover after those costs sits below the cap.
The bare DTI ratio without inverting an amount lives on the DTI page. A payment from a known 400,000 at 7% for 25 years, 2,827.12, lives on the mortgage page. A 20% down payment on 400,000, 80,000, lives on down payment. This calculator stays with a cap and an inverted annuity.
Header currency only labels the amounts. A comma and a period in 6.5 mean the same rate. The calculator waits for positive income, non-negative debts, a rate, a term, and a cap. This is teaching guidance, not a credit decision and not full mortgage underwriting.
Type 8,000, 1,500, 7, 25, and 40, click Calculate, and check 1,700 and 240,528. Then try 6,000, co-borrower 5,000, 2,000, 6.5, 30, and 40 to see 2,400 and 379,706.
How to use
- Type Monthly gross income, for example 8,000, and Current monthly debt payments, for example 1,500.
- Set Assumed annual rate (%), Assumed term (years), and Target affordability cap / DTI (%), for example 7, 25, and 40.
- Optionally add Co-borrower monthly gross income, living expenses, housing costs, Down payment, and Stress / buffer on rate (pp).
- Click Calculate. At 8,000, 1,500, 7%, 25 years, and 40% the payment is 1,700 and the loan about 240,528.
- The ratio of payments to income alone lives on the DTI page. A payment from a known amount lives on the mortgage page.
Capacity from a DTI cap and an inverted annuity
Available payment = income × DTI cap minus debts, then an annuity amount. At 8000, 1500, 7%, 25 years, and 40% the payment is 1700 and the loan is about 240528.
- DTI
- The affordability cap in this calculator, Target affordability cap / DTI (%). 40% of 8000 minus 1500 leaves a 1700 payment and about 240528.
- annuity
- Inverting a fixed payment to a loan amount. 1700 at 7% for 25 years is about 240528. Guidance, not underwriting.
- capacity
- Est. loan amount. Combined income 6000+5000 with 2000 of debts, 6.5%, and 30 years lifts the loan to about 379706.
Usage examples
Example 2
- 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
- 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.
Example 4
- Income 12,000
- Debts 2,000
- 35% cap
- 6.5%, 20 years
Payment cap 2,200
Amount ≈ 295,075
How much can I borrow on 12,000 income, 2,000 debts, and a 35% cap? Payment cap 2,200, Amount ≈ 295,075.
Example 5
- Income 6,000
- Debts 800
- 40% cap
- 7%, 25 years
Payment cap 1,600
Amount ≈ 226,379
How much can I borrow on 6,000 income, 800 debts, and a 40% cap? Payment cap 1,600, Amount ≈ 226,379.
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
Related calculators
FAQ
What capacity at 8,000, 1,500, 7%, 25 years, and 40% DTI?
Available payment 1,700, because 8000 × 0.40 − 1500 = 1700. Loan about 240,528 from the inverted annuity.
What do incomes 6,000 + 5,000 do with 2,000 of debts?
Cap 11,000 × 0.40 = 4,400, minus 2,000 leaves payment 2,400. At 6.5% for 30 years the loan is about 379,706.
Where do payment 2,150 and loan 279,615 come from in example 3?
9000 × 0.40 − 500 − (6000+2400)/12 − 250 = 2150. A 2 pp buffer prices the loan at 8.5% for 30 years, about 279,615. Plus down 80,000 is a budget of about 359,615.
What does DTI, debt to income, mean here?
Payments over income. A 40% cap cuts the available payment. The percent without inverting a loan lives on the DTI page.
Is 240,528 a credit decision?
No. There is no score, no offer minimum down payment, and no full underwriting. It is guidance from a cap and an annuity.
How does Stress / buffer on rate work?
It adds percentage points to the assumed rate only when the loan amount is computed. 6.5 plus 2 is 8.5, so the same 2,150 payment buys less loan.
Does an 80,000 down payment raise the payment?
No. The down payment adds to the purchase budget: loan plus down. The payment stays with the DTI cap.
Does a comma in 6.5 work?
Yes. 6,5 and 6.5 are the same rate. Header currency only labels the result.
Where is the payment on a known 400,000?
On the mortgage page: 7% for 25 years is 2,827.12. Here you invert a payment into an amount, not an amount into a payment.
Do living expenses of 2,500 always cut 2,150?
Only when leftover after those costs sits below the cap payment. In example 3 the payment stays 2,150, and housing already took 950 off the cap.
Knowledge sources
The amount comes from a DTI cap and an annuity on your numbers. This is guidance, not a credit decision.
Page updated in 2026.