Independent mortgage calculator. Not a lender, not financial advice.

Mortgage Pre-Approval Calculator: How Much You'll Actually Get Approved For

Updated 30 March 2026

Your income alone does not determine your pre-approval amount. Existing debts, credit score, down payment, and the DTI ratio lenders use all shape the number. A $100,000 income does not mean a $500,000 mortgage if you carry $600/month in car and student loan payments. This calculator models the same DTI math lenders use.

Your Financial Details

$2,000/mo$90,000/year$30,000/mo

Existing Monthly Debts

$
$
$
$

Total monthly debts: $850

$013.9% of home price$200,000

Estimated rate: 7% (30-year fixed)

Min 3% down, 620+ credit. PMI if under 20% down.

Estimated Pre-Approval Amount

$287,845

Loan amount: $247,845 with $40,000 down (13.9%)

Monthly Payment Breakdown

Principal and Interest$1,649
Property Tax (est. 1.1%)$264
Homeowner Insurance (est. 0.35%)$84
Private Mortgage Insurance (PMI)$103
Total Monthly Payment$2,100

Debt-to-Income Ratios

Front-End DTI (housing only)28.0%

Lenders prefer under 28%

Back-End DTI (all debts)39.3%

Maximum 43% for most loans (50% with compensating factors)

Ways to Increase Your Approval

  • •Increasing your down payment to 20% would eliminate PMI, saving you $103 per month.

How Lenders Calculate Your Pre-Approval Amount

The single most important number in mortgage pre-approval is the debt-to-income ratio (DTI). Lenders calculate two versions: front-end DTI (housing costs only divided by gross monthly income) and back-end DTI (all monthly debt payments divided by gross monthly income). Conventional loans typically require a back-end DTI of 43% or less. FHA loans may allow up to 50% with compensating factors like high credit scores or significant cash reserves.

Here is the math for a $96,000 annual income ($8,000/month gross) with $500/month in existing debts. At a 43% back-end DTI limit: maximum total monthly debt = $8,000 x 0.43 = $3,440. Subtract existing debts: $3,440 - $500 = $2,940 available for housing. Housing costs include principal, interest, property tax (estimated at 1.2% of home value per year), homeowner insurance ($1,200-$2,400/year), and PMI if under 20% down (0.5-1.0% of loan annually). After subtracting estimated taxes, insurance, and PMI from the $2,940, roughly $2,200-$2,400 remains for principal and interest. At 7% on a 30-year term, that supports a loan of $330,000 to $360,000.

Credit Score Impact on Pre-Approval

Excellent (760+)

6.75%

$2,594/mo on $400K loan

Very Good (720-759)

7.00%

$2,661/mo on $400K loan

Good (680-719)

7.25%

$2,729/mo on $400K loan

Fair (640-679)

7.50%

$2,797/mo on $400K loan

Poor (Below 640)

8.00%

$2,935/mo on $400K loan

The difference between a 760+ score (6.75%) and a below-640 score (8.00%) on a $400,000 30-year mortgage is $341 per month. Over 30 years, that totals $122,760 in additional interest. Improving your credit score by even 40-60 points before applying can save tens of thousands of dollars.

Down Payment Scenarios

Down PaymentCash Needed ($400K home)Loan AmountPMI/MIPTotal Monthly (7%)
3% (Conv)$12,000$388,000$162/mo$2,743
3.5% (FHA)$14,000$386,000$145/mo (permanent)$2,714
5%$20,000$380,000$142/mo$2,671
10%$40,000$360,000$105/mo$2,500
20%$80,000$320,000$0$2,129

Monthly totals include estimated property tax ($400/mo), homeowner insurance ($150/mo), and PMI where applicable. Interest rate: 7.0%.

What to Do Before Applying for Pre-Approval

Pay down credit card balances

Reducing your credit card balances lowers your monthly minimums (reducing DTI) and improves your credit utilization ratio (boosting your score). Paying off a $5,000 card with a $150/month minimum frees up $150/month in DTI capacity, which translates to roughly $22,500 more in mortgage approval.

Do not open new credit accounts

New credit applications create hard inquiries that temporarily lower your score by 5-10 points. New accounts also reduce your average account age. Avoid opening credit cards, financing furniture, or taking personal loans in the 3-6 months before applying for a mortgage.

Document your income thoroughly

Lenders need 2 years of W-2s or tax returns, 30 days of pay stubs, and 2 months of bank statements. Self-employed borrowers need 2 years of business tax returns. Gather these documents before applying to speed up the process from weeks to days.

Save for closing costs beyond the down payment

Closing costs run 2-5% of the loan amount ($6,000-$20,000 on a $400,000 loan). This is on top of your down payment. Lenders verify you have sufficient funds for both. Having 2-3 months of mortgage payments in reserves (cash left after closing) strengthens your application.

Frequently Asked Questions

How much mortgage can I get pre-approved for?+
Your pre-approval amount depends primarily on your debt-to-income (DTI) ratio. Lenders typically allow a maximum back-end DTI of 43% for conventional loans and 43-50% for FHA loans. On a $8,000/month gross income ($96,000/year) with $500/month in existing debts, the maximum total debt payment allowed at 43% DTI is $3,440. Subtract existing debts ($500) and you have $2,940 available for housing costs. At a 7% interest rate on a 30-year mortgage, this supports a loan of approximately $442,000. Add your down payment for the maximum purchase price.
What is the difference between pre-approval and pre-qualification?+
Pre-qualification is an informal estimate based on self-reported financial information, usually done online in 15 minutes without a credit check. Pre-approval is a formal assessment where the lender verifies your income (pay stubs, W-2s, tax returns), pulls your credit report, and reviews your assets. Pre-approval results in a conditional commitment letter specifying a loan amount, which carries significant weight when making offers on homes. In competitive markets, sellers typically require pre-approval letters with offers.
How does my credit score affect pre-approval?+
Credit score directly impacts your interest rate and loan eligibility. A 760+ score qualifies for the best conventional rates (approximately 6.75% in 2026). A 720-759 score adds roughly 0.25% to the rate. A 680-719 score adds about 0.50%. Below 680, rates increase further and some conventional loan programs become unavailable. FHA loans accept scores as low as 580 with 3.5% down payment. The rate difference matters significantly: on a $400,000 loan, the difference between 6.75% and 7.5% is approximately $200/month or $72,000 over the life of the loan.
How long does a mortgage pre-approval last?+
Most pre-approval letters are valid for 60 to 90 days from the date of issuance. After expiration, you need to request a new pre-approval, which may involve updated income verification and a new credit pull. If your financial situation has changed (new debts, job change, large purchases), the new pre-approval amount may differ. Multiple mortgage credit inquiries within a 45-day window count as a single hard inquiry for credit scoring purposes, so shopping multiple lenders for the best rate during this period does not significantly impact your credit score.
Does pre-approval guarantee I will get the mortgage?+
No. Pre-approval is a conditional commitment, not a guarantee. The loan still requires the property to appraise at or above the purchase price, your financial situation to remain stable between pre-approval and closing (no new debts, job changes, or large withdrawals), and the property to pass title search and any required inspections. Approximately 8-10% of pre-approved mortgage applications are ultimately denied, most commonly due to appraisal shortfalls, undisclosed debts discovered during final underwriting, or employment changes.
What debts count in the DTI calculation?+
Monthly debt payments included in DTI are: car loan or lease payments, student loan payments (even if in deferment, lenders use 0.5-1% of the balance as the estimated payment), credit card minimum payments, personal loan payments, child support or alimony, and any other monthly obligations reported to credit bureaus. Debts NOT included: utilities, cell phone bills, car insurance, health insurance premiums, groceries, and subscriptions. Your proposed mortgage payment (principal, interest, taxes, insurance, PMI/MIP) is also included in the DTI calculation.
Should I get an FHA or conventional loan?+
FHA loans are better if your credit score is below 680, you have limited savings for a down payment (3.5% minimum vs 3-5% conventional), or you have a higher DTI ratio (FHA allows up to 50% back-end DTI in some cases). Conventional loans are better if your credit score is 680+ (better rates), you can put 20% down (no PMI), or you want to avoid the permanent mortgage insurance that FHA requires for the life of the loan. On a $300,000 loan, FHA mortgage insurance (MIP) adds approximately $145/month permanently, while conventional PMI ($95-$150/month) drops off automatically when you reach 20% equity.
How much should I put down on a house?+
The optimal down payment depends on your financial situation. 3% down (conventional): lowest entry point, requires PMI ($80-$200/month depending on loan amount and credit score). 3.5% down (FHA): slightly higher, requires MIP for the life of the loan. 10% down: lower PMI rate, better terms. 20% down: no PMI requirement, strongest offer position, lowest monthly payment. Putting less than 20% down is not inherently bad. The opportunity cost of saving an additional $40,000 to reach 20% on a $400,000 home (waiting 2-3 years while renting) may exceed the PMI cost ($100-$200/month for a few years until you hit 20% equity through payments and appreciation).