Home Loan Eligibility Calculator
Lenders cap your monthly payment using two ratios: the front-end limits housing cost to a share of income, and the back-end limits total debt. The stricter one sets the loan you can qualify for.
Maximum loan amount
$262,629.96
- Maximum monthly payment
- $1,660.00
- Front-end limit
- $1,680.00
- Back-end limit
- $1,660.00
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Front limit = income x front ratio; Back limit = income x back ratio - debts; Loan from the lower limit
- income
- Gross monthly income
- debt
- Existing monthly debt payments
- front
- Front-end ratio, typically 28%
- back
- Back-end ratio, typically 36%
How to check the result by hand
- 1
Find your gross monthly income
Use income before tax. The ratios are defined against gross earnings, not take-home pay.
- 2
Apply the front-end ratio
Multiply income by the front-end ratio, typically 28%, to get the housing-only limit.
- 3
Apply the back-end ratio
Multiply income by the back-end ratio, typically 36%, and subtract existing monthly debt payments to get the total-debt limit on housing.
- 4
Take the stricter limit
The lower of the two limits is the payment ceiling, because the borrower must satisfy both tests.
- 5
Convert to a loan
Use the reverse amortisation formula to turn the payment ceiling into the maximum principal at your rate and term.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Home Loan Eligibility page.