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Loan Affordability Calculator

Find the maximum loan principal a target monthly payment can afford, given the interest rate and term.

Loan amount you can afford
$250,187.42
Total paid over the term
$540,000.00
Total interest
$289,812.58

How it works

This is the Loan Payment Calculator's own amortization formula solved backwards. That calculator finds the monthly payment M from a known principal P; this one starts from the payment you can afford and solves the same identity for principal instead: P = M · ((1+r)ⁿ − 1) ÷ (r(1+r)ⁿ), where r is the monthly interest rate (annual rate ÷ 12) and n is the number of monthly payments (years × 12).

In other words, it answers 'how much can I borrow' rather than 'what will my payment be' — the same underlying fixed-rate amortization math, just rearranged for the question you actually have when shopping for a loan with a budget in mind.

If the interest rate is 0%, the formula simplifies to the payment multiplied by the number of payments, since there's no interest to solve for.

FAQ

Why is the affordable loan amount less than payment × number of payments?

Because part of every payment goes toward interest, not principal — the borrowed amount (principal) is always less than the total you'll pay back, except in the special case of a 0% loan, where every dollar paid reduces principal directly.

Does this account for taxes, insurance, or my income?

No — this only inverts the principal-and-interest amortization formula from a payment, rate, and term you supply. It doesn't know your income or a lender's underwriting rules (like a debt-to-income limit), so treat the result as a math ceiling, not loan pre-approval.

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