Maximum loan amount calculator
The largest loan your income supports at a given debt burden, rate and term.
Fill in the fields and the result will appear here automatically.
Solves the reverse of the usual loan calculation: that one goes from an amount to a payment, this one goes from an affordable payment to an amount. The payment comes first, from your income and the debt burden you accept, and the loan is then the present value of that annuity. At a zero rate the formula would divide by zero, so the limit is taken on its own branch: with no interest the amount is simply the sum of all the payments. The result is a ceiling produced by a formula rather than an approved offer — a lender also weighs credit history, employment, dependants and collateral, and those conditions are outside the model.
How it works
Formula and logic
Income Y and selected share d% give monthly payment P=Y×d/100. Term n=round(12×years), at least one month. With constant nominal annual rate r%, i=r/1200; principal A=P×[1−(1+i)^−n]/i, or P×n at zero interest. Scheduled total is P×n, and interest is that total less A. Payments occur at month-end; fees, insurance, changing rates and contractual schedule rounding are excluded.
Example
On an income of 120,000 at a 40% burden, 18% and 20 years, the maximum amount is 3,110,195.14. At income 1000, share 30%, zero rate and one year, payment 300 gives principal 3600 and interest 0. A 0.1-year term rounds to one month: principal 300, not 360.
Fields and units
- Monthly income — $
- Selected share for the new payment, % — unitless
- Nominal annual rate, % — unitless
- Term, years — years
How to use
- — Enter your monthly income.
- — Enter the share of it you are willing to pay a lender.
- — Enter the interest rate and the term.
- — The result is a formula ceiling, not a lender's decision.
Method and limitations
- Calculation method
- Formula and logic
- Data or methodology source
- CFPB, United States: DTI uses gross monthly income; lender limits differ
- Limitation
- The amount is the present value of selected payments, not an approved or safe loan. Living costs, existing debts, creditworthiness and lender rules are not checked; a nominal rate does not replace full contractual cost.
FAQ
What debt burden should I use?
Choose the share for the scenario; the model does not label 40–50% a universal lending limit or safe budget. If it is a budget for all debts, account for existing repayments first and enter only the share remaining for the new loan. Household living costs are not tested here.
Will a lender approve the calculated amount?
No. It is the present value of the selected payments at the entered rate and term. A lender decision, income verification, existing obligations and collateral remain outside the model; this is neither an offer nor approval assurance.
Why doesn't the amount grow proportionally with the term?
Because each later payment is discounted more heavily than the one before. At 18%, doubling the term from 10 to 20 years adds noticeably less than half again to the amount.
How much does the rate matter?
For the same 240 monthly payments, reducing the nominal annual rate from 18% to 12% raises the present-value amount by about 40.16%. The effect depends on the term; this compares formulas without fees or changes in loan conditions.
Should income be before or after tax?
The CFPB educational definition of DTI uses income before taxes and deductions. For a personal take-home-pay budget, use a percentage of that same net base and do not compare it directly with gross-income DTI. Check lender requirements separately; the page language does not select a jurisdiction.