1. What is Maximum Home Loan Eligibility?

The maximum home loan eligibility calculator determines how much you can borrow based on your affordable monthly payment, interest rate, and loan term. It helps in financial planning before house hunting.

2. How Does the Calculator Work?

The calculator uses the loan principal formula:

Where:

• \( P \) — Maximum loan amount (principal)
• \( PMT \) — Affordable monthly payment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the present value of an annuity (series of equal payments) at a given interest rate over a specified period.

3. Importance of Loan Eligibility Calculation

Details: Knowing your maximum loan amount helps set realistic property budgets, ensures you don't overextend financially, and prepares you for mortgage pre-approval.

4. Using the Calculator

Tips: Enter your comfortable monthly payment, current interest rate, and desired loan term. Use realistic numbers - your actual approved amount may differ based on credit score, debt-to-income ratio, and other factors.

5. Frequently Asked Questions (FAQ)

Q1: What percentage of income should go to mortgage?
A: Most lenders recommend keeping housing costs below 28% of gross monthly income, though personal circumstances vary.

Q2: Does this include taxes and insurance?
A: No, this calculates principal and interest only. Add 1-2% of home value annually for taxes and insurance.

Q3: How does credit score affect loan amount?
A: Higher scores qualify for better rates, potentially increasing your borrowing power for the same payment.

Q4: What's the difference between 15-year and 30-year terms?
A: Shorter terms have higher payments but lower total interest. This calculator shows how term length affects loan amount.

Q5: Should I borrow the maximum amount?
A: Not necessarily. Consider future expenses, job stability, and emergency savings before committing to maximum payments.