How to use it
- Enter Monthly payment you can afford.
- Enter Annual rate %.
- Enter Term (years).
The formula
Max loan = payment × (1 − (1+r)⁻ⁿ) ÷ r.
Worked example
About this calculator
Lenders answer 'how much will you give me?'; this tool answers the healthier question — 'how much should I take?'. Fixing the payment first anchors the decision in your actual monthly budget, before a bank's marketing number does it for you.
Play with the rate field: at higher rates the same payment supports a visibly smaller loan. That sensitivity is exactly what happens to buyers when rates move between mortgage approval and completion — seeing it in advance is cheap insurance.
Frequently asked questions
Why calculate this direction?
Because budgets are real and loan offers are negotiable. Start from what you can pay, not what a lender will give.
Should I use my maximum budget?
No — leave room for rates rising, repairs and life. Many advisers suggest capping housing at 28% of gross income.
Does the term change the answer a lot?
Enormously. The same payment supports a far larger loan over 30 years than 15 — but costs much more interest.
Tips
- A shorter term costs less overall even if the payment is higher.
- Check the APR, not just the rate, to compare fairly.
- Read the fine print for fees and prepayment penalties.
Key terms
- APR
- Yearly cost including fees, as a percentage.
- Term
- How long you repay the loan.
- Collateral
- An asset securing the loan.