What is LTV and how does it affect my mortgage?

LTV (Loan-to-Value ratio) is the loan amount divided by the home's appraised value. Most conventional lenders allow up to 80% LTV without requiring PMI. FHA loans allow up to 96.5% LTV but require mortgage insurance.

What DTI ratio do lenders require?

For a qualified mortgage, lenders generally require a back-end DTI of 43% or less. Some lenders allow up to 50% for borrowers with strong credit and reserves. The back-end DTI includes all monthly debt payments divided by gross monthly income.

Does my mortgage limit also depend on my credit score?

Yes. Credit score affects the interest rate you qualify for, which in turn affects the monthly payment and therefore the maximum loan amount under DTI limits. A higher credit score typically means a lower rate and higher borrowing capacity.

🏠Home Mortgage Limit Calculator

Find your maximum mortgage amount using both LTV and DTI limits together.

Home Value (Appraised or Purchase Price)

Annual Gross Income

LTV Limit

Back-End DTI Limit

Interest Rate

Loan Term

years

Existing Monthly Debt Payments

How Mortgage Limits Are Calculated

Your maximum mortgage is determined by the stricter of two limits: LTV (based on the home's value) and DTI (based on your income). You must satisfy both constraints simultaneously.

LTV Limit

Home Value × LTV% = Maximum loan based on collateral. At 80% LTV, a $500,000 home allows a maximum loan of $400,000. Going above 80% LTV typically requires Private Mortgage Insurance (PMI).

DTI Limit

Your gross monthly income × DTI% gives the maximum total monthly debt payment. Subtracting existing debt payments leaves the maximum new mortgage payment, from which the maximum loan amount is calculated.

Frequently Asked Questions

What is front-end DTI vs back-end DTI?

Front-end DTI includes only housing costs (PITI: principal, interest, taxes, insurance) divided by income — typically capped at 28–31%. Back-end DTI includes all monthly debts and is typically capped at 43%. This calculator uses back-end DTI.

Does down payment affect DTI?

Yes. A larger down payment means a smaller loan, lower monthly payments, and therefore lower DTI. If you are DTI-constrained, increasing the down payment is a direct way to qualify for a larger home.

How Mortgage Limits Are Calculated

LTV Limit

DTI Limit

Frequently Asked Questions

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