Mortgage Affordability Calculator
Lenders decide what you can borrow. This shows you what you can afford, which is frequently a smaller number.
How lenders decide
Two separate tests apply, and you are limited by whichever is tighter.
The income multiple. Most lenders cap lending at 4 to 4.75 times income, with the higher end usually reserved for higher earners or larger deposits. Existing debt commitments reduce this, which is why clearing a car loan before applying can increase borrowing capacity by considerably more than the loan balance.
The affordability assessment. A detailed look at actual income and outgoings — childcare, commuting, existing credit, dependants — stress-tested against a rate well above the one you are offered. This is why two people with identical salaries can be offered very different amounts.
This calculator uses a simplified version. A lender's own assessment will differ, and only a decision in principle from a lender gives you a figure you can rely on.
What you can afford is a different question
Borrowing the maximum offered is rarely wise. Useful guardrails:
- Keep the payment below about 35 % of take-home pay, and ideally below 30 %. Above 40 % there is very little room for anything to go wrong.
- Stress-test yourself, not just to the lender's rate. Could you cover the payment if rates rose three points, if one income stopped for six months, or if childcare costs arrived?
- Keep the emergency fund intact. Spending it all on the deposit leaves you with a house and no buffer, and houses generate unexpected expenses.
- Budget the other costs. The mortgage is not the cost of owning a home.
The costs the calculator ignores
Buying a home costs several percent of the price before you move in, and more every year afterwards:
| One-off | Typical |
|---|---|
| Stamp duty or transfer tax | 0–10 % depending on price and jurisdiction |
| Legal fees and searches | £1,000–£2,000 |
| Survey | £400–£1,500 |
| Lender arrangement fee | £0–£2,000 |
| Moving costs | £500–£2,000 |
Then, annually: buildings insurance, service charges and ground rent on leasehold property, council or property tax, and maintenance. A common planning figure for maintenance is 1 % of the property value per year averaged over time — £2,850 on a £285,000 house, which arrives unevenly as a boiler one year and a roof another.
The higher the LTV, the higher the rate. Crossing a band boundary — from 90.5 % to 89.9 % — can be worth more than any negotiation, so if you are close to a threshold it is worth finding the extra deposit.
Frequently asked questions
How much deposit do I need?
Typically 5 % minimum, though rates improve substantially at 10 %, 15 % and 25 %. A larger deposit reduces both the amount borrowed and the rate charged on it, so the effect on total cost is bigger than it first appears.
Do lenders count all my income?
Basic salary in full; bonuses, overtime and commission are often counted at 50 % or require a two-year history. Self-employed applicants usually need two to three years of accounts. Benefits and rental income are treated differently by each lender.
Will clearing debts increase how much I can borrow?
Usually by several times the debt balance, because lenders reduce capacity by a multiple of the monthly commitment. Clearing a £200-a-month car loan can increase borrowing capacity by £7,000 or more — worth doing before applying.
Should I borrow the maximum?
Rarely. The maximum leaves no margin for rate rises, income interruption or the maintenance costs that come with owning rather than renting. Borrowing comfortably below it is what makes the next decade manageable.