Enter borrowing assumptions
Example data table
These sample scenarios show how income, debts, and stress testing can change your realistic borrowing range.
| Scenario | Monthly Income | Existing Debts | Affordable Payment | Stress Borrowing Power | Safe Borrowing |
|---|---|---|---|---|---|
| Balanced household | $7,000.00 | $450.00 | $2,350.00 | $275,519.47 | $261,743.49 |
| High income profile | $10,000.00 | $800.00 | $3,500.00 | $442,884.27 | $420,740.05 |
| Shorter term loan | $5,100.00 | $250.00 | $1,688.00 | $139,896.18 | $132,901.37 |
Formula used
1. Monthly income
Monthly Income = Gross Monthly Income + Other Monthly Income
2. Debt-ratio payment cap
Available Payment by DTI = (Monthly Income × Max DTI) − Existing Monthly Debts
3. Budget payment cap
Available Payment by Budget = Monthly Income − Taxes − Existing Debts − Living Expenses − Savings Buffer
4. Affordable payment
Affordable Monthly Payment = the lower of the two payment caps above, never below zero
5. Borrowing power
Borrowing Power = PMT × [1 − (1 + r)−n] ÷ r
Here, PMT is the affordable monthly payment, r is the monthly interest rate, and n is the total number of monthly payments.
How to use this calculator
- Enter your gross monthly income and any reliable secondary income.
- Add tax deductions, existing loan payments, living costs, and your savings buffer.
- Provide the expected loan rate, term, lender fee, and target DTI cap.
- Use a stress-test add-on to see whether your borrowing still looks comfortable.
- Click the calculate button to display the result block above the form.
- Review the safe borrowing figure before using the higher headline amount.
- Download the summary as CSV or PDF for comparison or recordkeeping.
Frequently asked questions
1. What does borrowing power mean?
Borrowing power is the estimated loan amount you can support based on income, debt limits, living costs, and the repayment structure.
2. Why are there two payment limits?
One limit comes from debt-to-income rules. The other comes from actual cash flow after taxes, expenses, and buffers. The smaller number is safer.
3. Why is the stress-test result lower?
A higher test rate reduces the loan amount that the same payment can support. It shows how sensitive affordability is to future rate pressure.
4. Should I rely on the largest borrowing figure?
Usually no. A safer borrowing level leaves room for rate changes, emergencies, and higher living costs. The recommended figure is intentionally more conservative.
5. Does down payment affect loan affordability?
The loan affordability comes from repayment capacity. Down payment does not raise that capacity, but it increases total purchase budget and lowers required borrowing.
6. Can I use net income instead of tax deductions?
You can, but then set tax deductions to zero and enter your net monthly income as gross income. Keep the rest of the assumptions consistent.
7. What is a good savings buffer?
A good buffer depends on income stability and risk tolerance. Many borrowers reserve enough cash to cover repairs, temporary income drops, and surprise bills.
8. Is this calculator a lender approval tool?
No. It is an estimate for planning. Actual approval can also depend on credit score, asset type, documentation, reserves, and lender policy.