Your Mortgage Limit Follows Whichever Rule Is Stricter: LTV or DTI
When lenders decide how much you can borrow for a mortgage, they check two separate limits: LTV (loan-to-value), which caps your loan as a percentage of the home's price, and DTI (debt-to-income), which caps your total debt payments as a percentage of your income. Whichever of the two produces the lower loan amount becomes your actual borrowing limit. The LTV cap depends on the loan program: conventional loans typically allow up to 80% without requiring mortgage insurance, FHA loans allow up to 96.5%, and VA loans can reach 100% for eligible veterans and service members. Most Qualified Mortgages cap DTI at 43%, though some conventional lenders prefer to see it at or below 36%. This calculator runs both checks and shows you the lower, and therefore binding, result. Keep in mind that lenders also weigh your credit score, cash reserves, and other underwriting factors beyond just LTV and DTI, so actual approved amounts can come in lower than this estimate, and it's wise to build in a buffer when planning your home search.
How It's Calculated
| Rule | Formula |
|---|---|
| LTV Limit | Home Price × LTV Rate by Loan Type |
| DTI Limit | (Annual Income×43% - Existing Debt) reverse-amortized at an assumed rate and term |
| Final Limit | The lower of the LTV Limit and DTI Limit |
Frequently Asked Questions
Both apply, and whichever produces the lower amount becomes your actual limit, so it's worth checking both.
Conventional loans typically cap around 80%, FHA allows up to 96.5%, and VA loans can reach 100% for eligible borrowers.
No, actual approval also factors in credit score, reserves, and lender-specific underwriting, so use this as a rough estimate only.
※ The DTI calculation assumes a 7.0% interest rate and 30-year term; actual limits, rates, and loan programs vary by lender.