Loan Affordability
Find the maximum loan amount a monthly budget can support after taxes, insurance, fees, interest rate, and term. Browser-side and private.
By Utilix Editorial Team · Added May 4, 2026 · Updated Sep 6, 2026
Scenario A
Input
Result
Enter a value for monthly payment budget to see your result.
How it works
Estimates the largest fixed-rate loan principal a monthly budget can support after reserving room for taxes, insurance, fees, or other monthly costs.
Formula
P = Payment x (1 - (1 + r)^(-n)) / r
- P
- Affordable loan principal
- r
- Monthly interest rate
- n
- Number of monthly payments
Step by step
- 01Subtract monthly non-debt costs from the total payment budget.
- 02Convert the annual interest rate to a monthly rate.
- 03Use the present-value form of the amortization formula to solve for principal.
- 04Add any down payment to estimate an all-in purchase price budget.
Examples
$1,500 budget with $300 other costs
With $1,200 available for principal and interest, the supported loan is about $190k.
Inputs
- Monthly payment budget:
- 1500
- Annual interest rate:
- 6.5
- Loan term:
- 30
- Down payment:
- 50000
- Monthly taxes, insurance, fees:
- 300
Result
- Maximum loan amount:
- 189853.08
- Max purchase price with down payment:
- 239853.08
More about this tool
This calculator works backward from the standard amortization formula: instead of computing a payment from a known principal, it solves for the principal a known payment can support.
Payment Available = Monthly Budget − Monthly Other Costs
Max Loan Amount = Payment Available × (1 − (1 + r)^(−n)) / r
Max Purchase Price = Max Loan Amount + Down Payment
Why "Monthly Other Costs" Matters
Your total monthly housing or loan payment budget rarely goes entirely to principal and interest. Property tax, homeowners insurance, HOA dues, or origination-linked fees all compete for the same budget. This calculator subtracts those costs first, so the "max loan amount" reflects what's actually left for principal and interest — not an inflated number that ignores real carrying costs.
This Is Not Loan Preapproval
A lender's preapproval process checks your income documentation, existing debt, credit score and history, assets, and employment — and applies underwriting rules that vary by lender and loan program. This calculator is a payment-capacity estimate based purely on the numbers you enter. Use it to sanity-check a budget before shopping, not as a substitute for an actual preapproval letter.
Setting Your Own Debt-to-Income Guardrail
Common lending guidelines cap total monthly debt (including the new loan) around 36-43% of gross monthly income, with housing costs alone often capped closer to 28%. Calculate your own comfortable payment budget using those ratios as a ceiling, then enter it here — building in a margin below the maximum a lender might approve gives you flexibility if rates, taxes, or insurance premiums rise after you commit.
Pair this with the Mortgage Calculator once you've settled on a target purchase price, to see the exact payment breakdown for a specific property.
Frequently asked questions
Is this the same as mortgage preapproval?
No. Preapproval also checks income, debt, credit, assets, and lender rules.
Why subtract monthly other costs?
Costs like taxes, insurance, HOA fees, or service fees reduce the payment left for principal and interest.
How does this relate to debt-to-income (DTI) ratio?
Lenders typically cap total monthly debt payments (including the new loan) at 36-43% of gross monthly income, with a tighter housing-only limit around 28%. Set your monthly payment budget here based on your own DTI target, then compare the resulting loan amount against a lender's stated limits.
Should I use my maximum affordability as my target purchase price?
Not necessarily. This shows what you can afford on paper, but budgeting the maximum leaves no room for rate increases (on variable products), rising insurance or tax costs, or other financial goals. Many buyers target 80-90% of their calculated maximum for a safety margin.
Does a larger down payment always increase my affordable purchase price?
Yes, dollar-for-dollar — the down payment adds directly to the loan amount this calculator supports to determine the maximum purchase price. It does not, however, change the maximum loan amount itself, since that's driven by your payment budget and rate.