How to use the home loan eligibility calculator
- Enter your monthly income and any existing monthly debt.
- Enter the expected interest rate, term, and the front- and back-end ratios your lender uses.
- Read the tighter payment limit and the maximum loan it supports.
Front-end vs back-end ratios
The front-end ratio limits housing cost to a share of income; the back-end ratio limits total debt payments. Lenders use the stricter of the two to set your payment ceiling.
A worked example
With $6,000 income, $500 debt, a 28% front-end and 36% back-end ratio, the front-end allows $1,680 and the back-end allows $1,660. The tighter $1,660 at 6.5% over 30 years supports a loan of about $254,000.
Rates and terms move the number
A lower rate or longer term raises the loan you qualify for; a higher debt load or stricter ratio lowers it. Run a few scenarios before you shop.