Where do these numbers come from?
- Standard formulasAmortization M = P·r(1+r)^n / ((1+r)^n − 1) and monthly compoundingreviewed Oct 23, 2026
- Freddie MacPMMS mortgage-rate benchmarkweek of Oct 22, 2026
Checked Oct 23, 2026. $320,000 at 6.5% over 360 months: this calculator gives $2,022.62 a month and =PMT(6.5%/12; 360; -320000) in LibreOffice Calc (same PMT as Excel and Google Sheets) returns 2,022.62.
- Instant answersResults update as you type.
- Private by designRuns in your browser. Nothing is sent.
- Share, print or citeCopy a link with your numbers.
Car budget by income (10% rule, 48 months at 7%)
| Gross income | Max monthly payment | Loan amount | Car price with 20% down |
|---|---|---|---|
| $50,000 | $417 | $17,400 | $21,800 |
| $75,000 | $625 | $26,100 | $32,600 |
| $100,000 | $833 | $34,800 | $43,500 |
| $125,000 | $1,042 | $43,500 | $54,400 |
| $150,000 | $1,250 | $52,200 | $65,300 |
Price column assumes the loan covers 80% of the price; taxes, fees and insurance are extra.
Worked example
On $75,000 a year, 10% of gross monthly income is $75,000 × 10% ÷ 12 = $625.00. At 7% APR for 48 months, each $1 borrowed costs $0.02 a month, so the payment supports a loan of about $26,100. With 20% down, that is a car of about $32,600.
Why longer loans are risky
Stretching to 72 or 84 months lowers the payment but costs more interest and makes it more likely you will owe more than the car is worth (negative equity) for the first few years, since new cars lose value quickly. If the car only fits on an 84-month loan, the guideline suggests a cheaper car.
| Term (7% APR) | Payment on $30,000 | Total interest |
|---|---|---|
| 36 months | $926.31 | $3,347 |
| 48 months | $718.39 | $4,483 |
| 60 months | $594.04 | $5,642 |
| 72 months | $511.47 | $6,826 |
| 84 months | $452.78 | $8,034 |
Costs beyond the payment
Insurance, fuel or charging, maintenance, registration and parking can add hundreds a month. A stricter version of the rule keeps total car costs, not just the payment, under 10–15% of take-home pay.
Rates in the tables are a range for comparison, not current market quotes. Payments are principal and interest only unless stated.
Related
Frequently asked questions
How much car can I afford on $50k a year?
About $417 a month under the 10% rule, or a car near $21,800 with 20% down on a 48-month loan at 7%.
How much car can I afford on $100k a year?
About $833 a month, or a car near $43,500 with 20% down over 48 months at 7%.
What is the 20/4/10 rule?
At least 20% down, a loan of 4 years or less, and car payments under 10% of gross income.
Is a 72-month car loan bad?
It lowers the payment but adds interest and raises the risk of owing more than the car is worth.