Budget Calculator — Affordable Loan Payment and Amount
How much can you borrow? From net income, fixed costs, debt-to-income ratio, rate and term, get the maximum payment and loan amount, with 25–40% scenarios.
Recommendation: 30-40% of net income
Max. Monthly Payment
€1,120.00
limited by the debt-to-income ratio (35 % of net income)
Max. Loan Amount
€184,824.48
Available (net − fixed expenses)
€1,400.00
Scenarios at 4.0 % interest, 20 years
| Debt Ratio | Max. Payment | Max. Loan | Status |
|---|---|---|---|
| 25 % | €800.00 | €132,017.49 | Realistic |
| 30 % | €960.00 | €158,420.98 | Realistic |
| 35 % | €1,120.00 | €184,824.48 | Realistic |
| 40 % | €1,280.00 | €211,227.98 | Realistic |
Note: These calculations are for informational purposes only and do not replace professional tax or financial advice. All information without guarantee.
FAQ
Frequently Asked Questions
How much credit can I afford?
That depends on the monthly payment your budget can carry permanently. The calculator takes the smaller of debt-to-income ratio × net income and net income minus fixed expenses, and uses the interest rate and term to work back to the loan amount that this payment fully repays. Example: a €1,120 payment at 4 % over 20 years supports about €184,824.
What debt-to-income ratio makes sense?
As a rule of thumb, 30–40 % of net income is the upper limit for all loan payments together; if you want to build savings or cushion irregular income, stay closer to 25–30 %. What matters is that a buffer remains after the payment and fixed expenses. Banks also check your creditworthiness and apply their own flat rates for living costs.
Why does the loan amount depend so much on the rate and term?
The loan amount is the present value of the payments: payment × (1 − (1 + i)^−n) / i. With a €1,120 payment over 20 years that is about €201,948 at 3 %, €184,824 at 4 % and €169,708 at 5 %. A longer term increases the possible amount, but also the total interest cost.
Are my entered amounts stored anywhere?
No. All calculations happen exclusively in your browser. Your inputs are never sent to our server or stored. You can safely enter sensitive financial data.
Guide
What is the Budget Calculator — Affordable Loan Payment and Amount?
The budget calculator shows how much credit fits into your household budget: net income, fixed expenses and a maximum debt-to-income ratio give the highest affordable monthly payment, and the interest rate and term give the loan amount that this payment fully repays.
How does the Budget Calculator — Affordable Loan Payment and Amount work?
Enter your monthly net income, your fixed monthly expenses, the maximum share of net income for the loan payment (debt-to-income ratio), the interest rate and the term in years. The calculator takes the smaller of ratio × net income and the amount left after fixed expenses (net income − fixed expenses) as the monthly payment. It calculates the maximum loan amount as the present value of that payment: an annuity loan with a constant monthly payment that is fully repaid at the end of the term. A table compares debt-to-income ratios of 25, 30, 35 and 40 % and flags payments that exceed the amount left after fixed expenses as "Too high".
Key Data and Facts
Formula: loan amount = payment × (1 − (1 + i)^−n) / i, where i = annual rate / 12 and n = term in months (at 0 % interest: payment × n). Rule of thumb: all loan payments together should not exceed 30–40 % of net income, more cautiously 25–30 %. Available = net income − fixed expenses. Not included: ancillary financing costs (for property e.g. real estate transfer tax, notary, agent), rate changes after a fixed-rate period, special repayments and the bank's credit check.
Step-by-Step Guide
How to work out your borrowing limit step by step: 1. Enter net income: the monthly household income after tax and social security, without uncertain income such as bonuses or overtime. 2. Include all fixed expenses: housing, insurance, transport, food, existing loan payments and a buffer for the unexpected. 3. Choose the debt-to-income ratio: it caps the payment at a share of net income; 30–40 % is considered the upper limit, 25–30 % leaves more room for savings. 4. Enter the interest rate and term: ideally the borrowing rate from a concrete offer or a cautiously chosen market rate. 5. Read the result: the maximum monthly payment is the smaller of ratio × net income and the amount left after fixed expenses; the line below the payment shows which limit applies. The maximum loan amount is the sum that this payment fully repays within the chosen term. 6. Compare scenarios: the table shows the payment and loan amount at 25, 30, 35 and 40 % of net income; "Too high" means the payment would be larger than what remains after fixed expenses. 7. Keep a reserve: after the payment and fixed expenses there should be money left for savings and rising costs.
Calculation Example
Net income €3,200, fixed expenses €1,800: €1,400 available. Debt-to-income ratio 35 %: 3,200 × 35 % = €1,120 payment (less than €1,400, so the ratio is the limit). 4 % interest, 20 years (240 months, i = 0.3333 %): loan amount = 1,120 × (1 − 1.003333^−240) / 0.003333 = 1,120 × 165.02 = €184,824. Scenario 40 %: €1,280 payment, €211,228. If fixed expenses rise to €2,200, only €1,000 is available: the payment is then capped at €1,000 (€165,022) and the 35 % and 40 % scenarios are "Too high".
Sources
Official sources
Calculations are based on applicable German laws and official data:
- Deutsche Bundesbank
- Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)
- Statistisches Bundesamt (Destatis)
Full methodology at Methodology.
Reviewed by Konstantin Iakovlev · Last updated:
Finance
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