Is borrowing power the same as preapproval?

No. Borrowing power is a planning estimate. Preapproval requires lender review of credit, income, assets, debts, and property assumptions.

Why does down payment affect home price but not the monthly mortgage amount directly?

Down payment adds to the estimated price you can target. The mortgage amount is still driven by the monthly principal-and-interest room under the selected DTI.

What target DTI should I enter?

A 43% back-end DTI is a common planning benchmark, but some borrowers qualify below or above it depending on loan program and lender rules.

Mortgage Borrowing Power Calculator

Estimate how much you can borrow for a mortgage from gross monthly income, debts, down payment, APR, term, housing costs, and target back-end DTI.

Gross monthly income ($)

Co-borrower income ($/month)

Existing monthly debts ($)

Down payment ($)

APR (%/year)

Term (months)

Property tax ($/year)

Home insurance ($/year)

HOA dues ($/month)

PMI ($/month)

Target back-end DTI (%)

How much can I borrow for a mortgage?

English borrowing-power intent is closer to mortgage affordability than to a generic maximum loan amount. The useful estimate starts with gross income and a target back-end DTI, then subtracts existing debts and housing add-ons before converting the remaining payment room into a loan amount.

Gross monthly income and optional co-borrower income.
Existing monthly debts.
Down payment, APR, and loan term.
Property tax, home insurance, HOA dues, and PMI estimates.
Target back-end DTI for the scenario.

Estimate only

Borrowing power is not preapproval. Credit, verified income, property type, reserves, rates, fees, and lender overlays can change the final amount.

Borrowing power model

M a x h o u s in g p a y m e n t = I n co m e \cdot T a r g e t D T I - E x i s t in g d e b t s

This is the maximum payment room under the selected back-end DTI.

P & I r oo m = M a x h o u s in g p a y m e n t - T a x es - I n s u r an ce - H O A - P M I

The remaining room is converted into an estimated mortgage amount.

H o m e p r i ce = E s t ima t e d m or t g a g e + D o w n p a y m e n t

Closing costs and cash reserves are not included in this simplified home-price estimate.

Frequently Asked Questions

Sources and References

Calculations are based on the listed reference sources. Links open in a new tab.

Updated: June 2, 2026

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