How Much Can Alfred Borrow for a Home Loan in 2025? Detailed Breakdown

Alfred and Reena have a combined gross income of $266,400 per year and support two children. With existing debts—a $990,000 mortgage and a car loan costing $1,100 per month—they’re exploring their capacity for an additional home loan in 2025.

Financial Summary

• Combined Gross Income: $266,400
• Estimated Net Income: ~$190,000/year (~$15,833/month)
• Liabilities:
  • Mortgage balance: $990,000
  • Car loan payments: $1,100/month (~$13,200/year)
  • Credit cards: $14,000 limit, currently zero balance
• Living Costs (Family of 4): ~$3,500/month (~$42,000/year)
• Existing Debt-to-Income Ratio: ~$1.03M ÷ $266,400 ≈ 3.9×

Bank Lending Criteria Snapshot

• DTI Limit: Typically 6–8× gross income → max total debt ~$1.6M–$2.1M
• Stress-Test Rate: Banks often assess repayments at 8–9% interest
• Net Income Surplus: ~$62,800/year available for new loan repayments

Borrowing Power Estimate

• Estimated Maximum New Loan: $450,000–$550,000
• Total Borrowing Capacity: ~$1.5M–$1.6M (aligned with DTI limits)

Challenges & Opportunities

• No liquid savings may concern some lenders.
• Dependents increase living costs, slightly reducing capacity.
• Strong income and clean repayment history are positives.

Recommendations

1. Build a modest savings cushion to strengthen your application.
2. Engage a mortgage broker to compare lenders—some permit DTI above 6×.
3. Review actual living expenses; lower costs can boost loan capacity.
4. Consider consolidating or refinancing existing debt to improve serviceability.

Ready to explore your options? Chat with a loan specialist now to assess your borrowing power and streamline your next move.

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