Mortgage Affordability Calculator
Find out how much you could borrow based on your income, deposit, and existing commitments. No credit check required.
How Do Lenders Calculate Affordability?
When you apply for a mortgage, lenders assess how much you can afford to borrow based on several factors. The most common method is applying an income multiple to your gross annual salary. Most high street lenders use a multiple of 4.5 times your income as their standard calculation, though some may offer up to 5.5 times income in certain circumstances.
Understanding Income Multiples
Income multiples are the simplest way to estimate borrowing capacity. A 4.5x multiple means that if you earn £50,000 per year, you could potentially borrow up to £225,000. Joint applications combine both incomes before applying the multiplier. Some lenders offer enhanced multiples of 5x or even 5.5x for applicants who meet specific criteria, such as higher earners or those in certain professions.
What Affects How Much You Can Borrow?
Beyond income, lenders consider your existing financial commitments. Monthly outgoings such as loan repayments, credit card minimum payments, car finance, child maintenance, and other regular debts all reduce the amount you can borrow. Lenders also factor in your credit history, employment type, and the size of your deposit when making their decision.
Stress Testing Your Mortgage
Lenders are required by the Financial Conduct Authority to carry out affordability stress tests. This means they check whether you could still afford your mortgage repayments if interest rates were to rise significantly, typically by around 3% above the lender's standard variable rate. This stress test can reduce the maximum amount a lender is willing to offer compared to a simple income multiple calculation.
Frequently Asked Questions
How much can I borrow for a mortgage?
Most lenders will offer between 4 and 4.5 times your annual gross income as a standard mortgage. Some lenders may stretch to 5 or even 5.5 times income for applicants with strong financial profiles. Joint applicants can combine their incomes to increase borrowing power.
What income multiple do mortgage lenders use?
The most common income multiple is 4.5x your gross annual salary. Some lenders offer enhanced multiples of 5x or 5.5x for higher earners, certain professions such as doctors or solicitors, or applicants with large deposits. The exact multiple depends on the lender and your individual circumstances.
Do existing commitments reduce how much I can borrow?
Yes. Lenders take into account your existing monthly financial commitments, including loan repayments, credit card bills, car finance, child maintenance, and other regular outgoings. These commitments reduce the amount a lender will offer because they affect your disposable income and ability to meet mortgage repayments.
Can I borrow more with a bigger deposit?
A larger deposit does not directly increase the amount you can borrow, which is primarily based on your income. However, a bigger deposit means you need to borrow less relative to the property price, giving you a lower loan-to-value ratio. This can give you access to better mortgage rates and make lenders more willing to lend, particularly at enhanced income multiples.
How much can I borrow if I am self-employed?
Self-employed applicants can typically borrow the same income multiples as employed applicants. However, lenders usually require at least two to three years of accounts or SA302 tax calculations to verify income. Some lenders will use your average income over two or three years, while others may use the latest year. A mortgage adviser can help identify lenders best suited to your self-employed circumstances.
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