Understanding Your Home Loan Eligibility
Our home loan eligibility calculator uses industry-standard lending criteria to estimate the maximum mortgage you can qualify for. By analyzing your gross monthly income, existing debt obligations, credit tier, and property value, we compute your approval likelihood and provide actionable insights to improve your mortgage affordability.
How Much House Can You Afford?
The amount you can borrow depends on two key metrics: the housing ratio (typically 30–35% of gross income toward mortgage payment) and your debt-to-income ratio (all debts, including the new mortgage, should not exceed 40–45% of income). We apply both constraints and select the lower limit as your maximum allowable monthly payment.
Loan-to-Value (LTV) Limits
Your credit score tier determines the maximum LTV band—excellent credit may qualify for 90% LTV, while fair credit may be limited to 80% or less. This LTV cap converts your property value into a maximum loan ceiling. If your income-based approval is higher than your LTV-capped amount, the LTV limit takes precedence.
Stress-Test Interest Rate
We add a stress buffer (typically +2–3%) to your target interest rate to model "worst-case" affordability. This ensures your approval remains sound even if rates rise. The stress-tested monthly payment is then converted to your maximum loan amount using standard amortization formulas.
Age & Term Cap
Most lenders require loans to be fully paid by retirement age (typically 65–70). We cap your desired loan term so it aligns with this age limit, preventing unrealistic long-term structures.
Why Use This Mortgage Calculator?
- Instantly calculate your maximum home loan approval amount without bank applications.
- Understand your required down payment to meet lending standards.
- Compare monthly payments at actual and stress-tested interest rates to gauge affordability under stress.
- Identify barriers to approval early (low credit score, high DTI, employment tenure issues) and plan improvements.
- Make confident offers based on realistic borrowing power.
Disclaimer: This calculator provides estimates only and is not a formal loan pre-qualification or approval. Actual loan terms, rates, and limits vary by lender, region, and current market conditions.