This mortgage affordability calculator helps you work out how much you can realistically borrow for a mortgage in the UK, based on your income, deposit, and outgoings. Understanding your borrowing power is a crucial first step in the home-buying process, and this tool is designed to give you a clear, practical estimate tailored to your situation.
How Does This Mortgage Affordability Calculator Work?
Our calculator uses a range of personal and financial details to estimate your maximum mortgage amount. By entering your income, deposit, monthly debts, interest rate, and loan term, you’ll get a tailored estimate of what you can afford.
Key factors considered include:
- Your annual income (single or joint)
- Size of your deposit
- Monthly outgoings (loans, credit cards, childcare, etc.)
- Mortgage interest rate
- Loan term (years)
The calculator applies typical lender rules to estimate your borrowing limit, but actual offers may vary.
What Factors Are Used to Determine Home Affordability?
Lenders use a detailed assessment to decide how much you can borrow. Understanding these factors can help you prepare your finances and improve your chances of getting the mortgage you want. Here’s a breakdown of the key elements:
- Credit score and history: Lenders check your credit report to see how reliably you’ve managed debt in the past. A higher score can unlock better rates and higher borrowing limits, while a poor score may mean you need a bigger deposit or pay higher interest.
- Size of your deposit (affects your LTV): The more you can put down, the lower your loan-to-value (LTV) ratio. Lower LTVs mean less risk for the lender and access to better deals.
- Employment type and stability: Being in a permanent, full-time job is usually seen as less risky than being self-employed or on a temporary contract. Lenders may ask for more documentation if you’re self-employed or have variable income.
- Monthly debts and financial commitments: Lenders look at your regular outgoings—like loans, credit cards, car finance, childcare, and maintenance payments—to make sure you can afford your mortgage on top of existing commitments.
- Number of dependents: More dependents (children or adults you support) can reduce your borrowing power, as they increase your living costs.
- The lender’s own affordability criteria: Each lender has their own rules, including how they calculate allowable income, acceptable debts, and how much of your income can go towards mortgage payments.
Other factors that can play a role include your age, the type of property you’re buying, and even your spending habits (some lenders review bank statements for discretionary spending).
Generally, the lower your debts and the higher your income and deposit, the more you’ll be able to borrow. Preparing your finances in advance—by paying down debt, saving a bigger deposit, and keeping your credit record clean—can make a big difference to your affordability and the deals you’re offered.
Typical Income Multiples
When lenders assess how much you can borrow, one of the first tools they use is the “income multiple”—a simple ratio that multiplies your gross annual income by a set number (the multiple) to estimate your maximum loan. This approach gives a quick upper limit, but the actual amount you can borrow will also depend on your outgoings, debts, and the lender’s own affordability checks.
How Income Multiples Work
Most UK lenders typically offer between 4 and 4.5 times your annual income, but the multiple can vary based on your circumstances:
- Single applicants often see offers between 4x and 4.5x their income.
- Joint applicants (e.g., couples) may be able to borrow slightly more, especially if both incomes are stable.
- Certain professions (like doctors, lawyers, or accountants) and high earners may qualify for higher multiples, sometimes up to 5.5x or 6x, especially with specialist lenders.
- First-time buyers may occasionally access higher multiples through government schemes or specific lender promotions.
Typical Maximum Mortgage by Income and Multiple
| Annual Income | 4x Multiple | 4.5x Multiple | 5x Multiple | 5.5x Multiple | 6x Multiple |
|---|---|---|---|---|---|
| £25,000 | £100,000 | £112,500 | £125,000 | £137,500 | £150,000 |
| £30,000 | £120,000 | £135,000 | £150,000 | £165,000 | £180,000 |
| £40,000 | £160,000 | £180,000 | £200,000 | £220,000 | £240,000 |
| £50,000 | £200,000 | £225,000 | £250,000 | £275,000 | £300,000 |
| £60,000 | £240,000 | £270,000 | £300,000 | £330,000 | £360,000 |
| £80,000 | £320,000 | £360,000 | £400,000 | £440,000 | £480,000 |
Note: Most mainstream lenders cap at 4.5x, but some specialist lenders or applicants with strong profiles may access higher multiples. Regulatory rules (such as those from the Bank of England) limit how many high-multiple loans a lender can offer, so not everyone will qualify.
When Are Higher Multiples Available?
Lenders may consider higher income multiples if:
- You have a high, stable income and low debts
- You work in a profession considered low risk
- You have a large deposit (lowering your LTV)
- You are a first-time buyer using a government scheme
However, these cases are exceptions rather than the rule. Most borrowers should plan around the 4x–4.5x range, and always check with individual lenders for their criteria.
Example: Calculating Affordability
Suppose you earn £40,000 per year, have a £20,000 deposit, and no major debts. A lender using a 4.5x income multiple might offer:
£40,000 × 4.5 = £180,000 (maximum mortgage)
Add your deposit: £180,000 + £20,000 = £200,000 (maximum property price)
Mortgage Affordability Formula Breakdown
Lenders use a combination of income multiples and affordability checks. Here’s a simplified formula:
Maximum Mortgage = (Annual Income × Income Multiple) – Annual Debt Payments
Or, for monthly budgeting:
Maximum Monthly Payment = (Net Monthly Income – Monthly Outgoings) × Lender’s Allowable Percentage
Lenders will also stress-test your finances to ensure you could still afford payments if interest rates rise.
Example: Full Affordability Calculation
Let’s say:
- Joint income: £60,000
- Monthly debts: £300
- Deposit: £30,000
- Interest rate: 5%
- Loan term: 25 years
Step 1: Maximum mortgage (4.5x income): £60,000 × 4.5 = £270,000 Step 2: Check monthly affordability (assuming lender allows up to 35% of net income): - Net monthly income (approx): £3,600 - Allowable for mortgage: £3,600 × 0.35 = £1,260 - Subtract debts: £1,260 – £300 = £960 available for mortgage Step 3: Calculate how much you can borrow with £960/month at 5% over 25 years (approx £179,000) Step 4: Add deposit: £179,000 + £30,000 = £209,000 (maximum property price)
Tips for Improving Mortgage Affordability
If you want to boost your borrowing power and improve your chances of getting the best mortgage deal, there are several practical steps you can take. Lenders look for applicants who are financially stable, have manageable debts, and can demonstrate responsible money management. Here are some strategies to help you qualify for a larger mortgage or better rates:
- Pay down existing debts before applying
- Save a larger deposit to reduce your LTV
- Increase your income (second job, bonuses, etc.)
- Reduce monthly outgoings where possible
- Shop around with different lenders, as criteria vary
Frequently Asked Questions
Can I get a mortgage with bad credit?
It’s possible, but you may need a bigger deposit and will likely pay higher rates.
How much deposit do I need?
Most lenders require at least 5–10%, but a bigger deposit gets you better rates.
Does affordability change for buy-to-let mortgages?
Yes, buy-to-let mortgages use rental income and different criteria.
Will lenders check my spending?
Yes, most lenders review your bank statements and regular outgoings.
Is this calculator accurate for all lenders?
No, it’s an estimate—always check with your chosen lender for their exact criteria.
Disclaimer: This calculator provides an estimate for informational purposes only as mortgage lenders criteria may vary in determining the size of a loan you are able to have.