How Lenders Calculate Your Mortgage Limit
US mortgage lenders use two key limits: LTV (Loan-to-Value) and DTI (Debt-to-Income). The lower of the two determines your maximum loan amount. LTV caps how much of the home's value you can finance; DTI caps how much of your income can go toward debt payments.
Conventional loans typically require LTV ≤ 80% (or PMI kicks in) and DTI ≤ 43%. FHA loans allow LTV up to 96.5% with a 3.5% down payment and DTI up to 50% in some cases. In 2025, 30-year fixed mortgage rates hover around 6.5–7.5%.
This calculator gives a quick pre-qualification estimate. For an accurate assessment, contact a lender who will check your credit score, employment history, and full debt profile.
Frequently Asked Questions
Conventional loans typically require a 620+ credit score. FHA loans allow scores as low as 580 with 3.5% down. Higher credit scores unlock lower interest rates and better terms.
Pre-qualification is an informal estimate based on self-reported data. Pre-approval requires a formal application, credit check, and document verification — and is what sellers take seriously.