Mortgage Affordability Calculator UK

How to use this calculator

1. Use gross income, before taxBoth tests work from gross. Include reliable regular bonus or overtime only if a lender would — many count 50% of variable pay, some none at all.
2. List every credit commitmentCar finance, personal loans, card minimums and student loan repayments all reduce the surplus. Lenders see them on your credit file whether you declare them or not.
3. Leave the stress uplift alone unless you know betterThree points above the product rate is a common assumption. Lenders vary, and some use a floor rate instead.
4. Read which test bindsThat is the useful output. If the multiple binds, a bigger deposit or a longer term will not help; if affordability binds, clearing a car loan might.

Two tests, and the lower one wins

Since the mortgage market review, lenders have been required to assess affordability rather than simply applying a multiple. In practice both survive, and passing one is not enough.

The income multiple is a blunt cap. Most lenders sit between 4 and 4.5 times income, with higher multiples available to higher earners or in specific professional schemes. It is easy to calculate and it is the number every headline quotes.

The affordability assessment is the one that usually binds. It works from what is actually left each month after committed expenditure, then tests whether that surplus would still cover the payment at a stressed rate several percentage points above the one you would pay.

That stress test is not a formality. Discounting a monthly surplus at 7.5% rather than 4.5% over 25 years reduces the supportable loan by roughly a fifth, which is more than enough to move the binding constraint.

It exists because most UK mortgages fix for two to five years and then revert to a much higher variable rate. A borrower who could only just afford the initial rate would be in serious difficulty on reversion, and the test is designed to prevent lending into that position.

Knowing which test binds tells you what to do about it. If the income multiple binds, your surplus is comfortable and the cap is arbitrary — a different lender with a higher multiple is the answer. If affordability binds, reducing committed expenditure directly increases what you can borrow, and clearing a car finance agreement can be worth more than saving the same amount toward the deposit.

One caveat on that last point. Clearing a loan helps only if the money did not come from the deposit. Using £5,000 of deposit to clear £5,000 of car finance improves the affordability test but worsens the loan-to-value, and which wins depends on where you sit against the LTV bands.

Worked example: £45,000 income with a £30,000 deposit

Test one, the income multiple. £45,000 × 4.5 = £202,500.

Test two, affordability. Monthly gross income is £3,750. At a maximum of 35% on the mortgage, that allows £1,312.50 a month, with nothing deducted for other commitments in this example.

That £1,312.50 is then tested at the stressed rate of 7.5%, not the 4.5% product rate. Over 25 years at 7.5%, a payment of £1,312.50 supports a loan of £177,607.

The lower figure binds, so the maximum loan is £177,607 — not the £202,500 the multiple suggested. The affordability test is what limits this borrower, and it costs them nearly £25,000 of borrowing.

Adding the £30,000 deposit gives a maximum property price of £207,607, at 85.5% loan to value.

At the actual 4.5% product rate, the monthly payment on £177,607 over 25 years is £987 — about 26% of gross monthly income, which is comfortable. If rates reverted to 7.5%, the payment would be the full £1,312.50, which is exactly what the test was checking.

The effective income multiple achieved is 3.95 times, well short of the 4.5 headline. That gap between the advertised multiple and the achievable loan is the single most common surprise in a first mortgage application.

It also means the headline multiple is doing nothing here. Switch the lender to one offering 5 times income and the answer does not move at all — still £177,607 — because affordability was never going to let you reach the cap. Chasing a higher multiple only helps once the multiple is what binds.

Now change one thing. Add £300 a month of car finance. The surplus falls to £1,012.50, and the supportable loan falls to £137,011 — a reduction of £40,596 from a £300 monthly commitment.

That ratio is worth internalising: at these rates and this term, every £100 a month of committed expenditure costs roughly £13,500 of borrowing capacity.

Now extend the term to 35 years instead of 25. The supportable loan rises to £194,663, an increase of £17,056 — about 10%. It is a real gain, but a modest one for ten extra years of payments, because at a stressed rate that far above zero the later years add little present value. The total interest paid, meanwhile, rises substantially. Extending the term buys less borrowing power than most people expect and costs more than they expect.

What moves the answer

Two rows deserve attention. The 5× lender row is blank because the multiple is not what limits this borrower — shopping for a higher multiple achieves nothing until affordability stops binding. And the 40% row shows the crossover: at 40% of income the affordability test allows £225,000, so the £202,500 multiple takes over as the binding constraint and caps the answer there.

The deposit row is the one people misread most often. A larger deposit does not increase what you can borrow — it increases the price you can pay by exactly the extra deposit, and it improves the rate you are offered by moving you into a better LTV band. Both matter, but neither raises the loan itself.

Loan to value, and what lenders count as income

LTV bands drive pricing more than most borrowers realise. Rates step down at 95%, 90%, 85%, 80%, 75% and 60%, and the gap between adjacent bands can be substantial over a fixed term. Being a few hundred pounds short of a band boundary is worth fixing if you can.

Above 90%, choice narrows as well as pricing worsening. Some lenders will not go there at all on certain property types — new-build flats in particular are often capped lower.

On income, lenders differ sharply on what they count. Basic salary is straightforward. Bonus, commission and overtime are commonly counted at 50%, sometimes less, and usually need a two-year history. Self-employed applicants normally need two or three years of accounts or tax calculations, with the lender taking an average or the lower year.

Second jobs, rental income, maintenance payments and some benefits may count in full, in part, or not at all, entirely depending on the lender. This is the single largest source of variation between lenders for the same applicant, and it is why a broker who knows the criteria is worth more than a comparison table.

Expenditure is assessed against Office for National Statistics data as a floor, so declaring unusually low outgoings does not help — the lender substitutes a modelled minimum. What does help is genuinely reducing committed credit.

Credit file quality matters separately from affordability. Missed payments, high card utilisation and recent applications all affect which lenders will consider you and at what rate, independently of the arithmetic here.

One timing point: a decision in principle is a soft check with most lenders and is worth getting before viewing seriously, both to know your ceiling and because agents ask for it. The full application involves a hard check and a valuation, and the valuation can reduce the loan if the surveyor disagrees with the price.

Finally, do not borrow to the maximum simply because it is available. The stress test asks whether you could survive a rate rise, not whether you would enjoy it. Leaving headroom for a boiler, a car and a change of circumstances is the difference between a mortgage that works and one that dominates everything else.

Assumptions and limitations

• Every lender uses its own model, expenditure assumptions and stress uplift
• Uses a simple share-of-income cap rather than a full ONS expenditure model
• Does not assess credit history, employment type or property suitability
• Assumes a repayment mortgage — interest-only has separate and much stricter criteria
• Does not model LTV-banded pricing, which affects the rate you would actually be offered
• Treats all income as fully countable — lenders commonly discount bonus, commission and self-employed income
• Not financial advice, and not a lending decision — get a decision in principle

Questions people ask about this in United Kingdom