Borrowing Power Calculator
Estimate how much you may be able to borrow based on income and obligations. Enter your income, living costs, existing debts and loan assumptions to estimate an indicative borrowing capacity.
Enter your annual income before taxes and deductions.
Include other recurring income you expect a lender to consider.
Estimated monthly household and living expenses.
Current monthly loan, credit-card and other debt repayments.
Interest rate used to convert affordable monthly repayment into an indicative loan amount.
Repayment period assumed for the borrowing-power estimate.
Maximum share of gross monthly income assumed available for total debt payments.
Important
This is an indicative estimate, not a lender approval. Actual borrowing power can vary based on lender policy, income type, credit history, dependants, taxes, interest-rate buffers and other obligations.
How Borrowing Power Is Estimated
The calculator first estimates a maximum monthly debt commitment from gross monthly income and the selected debt-service ratio. Existing debt payments and monthly living expenses are then considered to estimate the amount available for a new loan payment. That affordable payment is converted into an indicative loan amount using the assumed interest rate and loan term.
Because lenders use different affordability models, the result should be treated as an estimate rather than a guaranteed borrowing limit.
Borrowing Power Formula
Maximum Debt Budget = Gross Monthly Income × Debt-Service Ratio
Available New Loan Payment = Maximum Debt Budget − Existing Debt Payments − Living Expenses
Borrowing Power = P × [(1 + r)ⁿ − 1] ÷ [r(1 + r)ⁿ]
P is the affordable monthly payment, r is the monthly interest rate and n is the number of monthly payments. If the available new loan payment is zero or negative, the indicative borrowing power is zero.
How to Use the Borrowing Power Calculator
Enter Your Income
Enter gross annual income and any other recurring annual income.
Enter Your Obligations
Add living expenses and existing monthly debt payments.
Set Loan Assumptions
Enter the assumed interest rate, term and maximum debt-service ratio.
Review the Estimate
Review indicative borrowing power and the monthly payment used for the estimate.
Example Borrowing Power Calculation
1,200,000 annual income with 30,000 monthly living expenses and 10,000 existing debt payments
- Gross Annual Income = 1,200,000
- Other Annual Income = 0
- Monthly Living Expenses = 30,000
- Existing Monthly Debt = 10,000
- Assumed Interest Rate = 9%
- Loan Term = 20 years
- Debt-Service Ratio = 40%
The calculator converts the resulting affordable monthly payment into an indicative borrowing amount.
Use the live calculator above for the exact estimate based on your inputs.
Factors That Can Affect Borrowing Power
Income
Higher stable income can increase the amount available for loan repayments.
Existing Debt
Current repayments reduce the capacity available for a new loan.
Living Expenses
Higher regular expenses can reduce the amount available for debt service.
Interest Rate
A higher assumed rate generally reduces borrowing power for the same affordable payment.
Loan Term
A longer term can increase borrowing capacity by spreading payments over more periods.
Credit Profile
Lenders may consider credit history, repayment behaviour and other risk factors.