From: Chris

I have a sum of cash that I want to use as a deposit $ 5000 and a lender will lend me 65% of the purchase price.

If the purchase price is is $ 10 000 then 65% is 6500 so I would need 10 000 - 6500 = 3500.

How do I calclate the maximum value I can borrow if I konw I have $5000 cash and the lender will lend 65% ?


Hi Chris.

If the lender will give you 65% of the price then you have to provide 35% of the price. You have $ 5 000, so that is your 35%. You need to figure out what total price this is. Let's call the total T:

35%timesT = $ 5 000

Now you can re-arrange this to solve for T, your maximum purchase price. To figure out how much of this you'd be borrowing, just subtract the $5 000 you are putting up as the deposit.

Hope this helps!