Mortgage Affordability Calculator
A realistic estimate of what you could borrow, what deposit you'd need, and the upfront costs people forget to budget for.
In short
Lenders apply both an income multiple, typically 4 to 4.5 times gross income, and an affordability test at a stressed interest rate, then lend the lower of the two. Budget another 3–5% of the price for fees and taxes.
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Two limits, and the lower one wins
Lenders apply both an income multiple and an affordability assessment, then lend the smaller of the two.
The multiple is the headline: typically 4 to 4.5 times gross income, sometimes 5.5 for higher earners or certain professions. Joint applications usually combine both incomes.
Affordability is the real constraint for most people. The lender looks at your actual committed outgoings, loans, cards, car finance, childcare, dependants. And checks what remains against a stressed payment. A £300 car finance agreement can reduce borrowing capacity by £15,000–20,000, which surprises people who assumed it was irrelevant because they could afford it.
The stress test
Lenders must check you could still pay if rates rose, typically testing at your rate plus 1 to 3 percentage points, or against a regulatory floor.
The figure above shows your payment at +3%. If that number is frightening, that is information worth having before you commit, fixed periods end, and the rate you revert to is not the rate you started with.
Loan to value, and why 5% steps matter
LTV is the loan as a percentage of the property price. Lenders price in bands, and the jumps between them are larger than the smooth progression people expect:
| Deposit | LTV | Rate availability |
|---|---|---|
| 5% | 95% | Limited choice, highest rates |
| 10% | 90% | Reasonable choice |
| 15% | 85% | Noticeably better, often the biggest single step |
| 20% | 80% | Good rates |
| 25%+ | 75% | Best rates generally available |
Crossing a band boundary can save more over a fixed period than several months of extra saving cost you. If you're at 88%, getting to 85% is usually worth waiting for.
The costs nobody budgets for
The deposit is the large number, but it is not the only one. Budget roughly 3–5% of the purchase price on top:
- Transfer tax / stamp duty: varies enormously by country and by whether you're a first-time buyer. Often the largest single item.
- Legal fees: conveyancing, searches, registration.
- Survey: a basic valuation is cheap; a full structural survey costs more and occasionally saves a fortune.
- Mortgage arrangement fee: sometimes addable to the loan, which means paying interest on it for decades.
- Removals and immediate works: nothing is ever quite move-in ready.
- Buildings insurance: usually required from exchange.
Running out of cash at completion is a genuinely common and avoidable problem. Keep a buffer beyond the deposit.
Borrowing the maximum is a choice, not a target
Lenders tell you a ceiling. It is not a recommendation, and the assessment does not know about your plans. A career change, a child, a year off, or simply wanting money left over to live on.
A useful sanity check: could you still cover the payment on one income, or with rates two points higher, without misery? If not, the number is too big regardless of what you've been offered.
An estimate based on general lending conventions, not a mortgage offer or financial advice. Actual decisions depend on your credit history, employment type, the property and each lender's own criteria. Speak to a qualified broker or lender before committing.
Frequently asked questions
How much can I borrow for a mortgage?
Most lenders start at 4 to 4.5 times gross annual income, stretching to 5.5 for higher earners or professionals. That is only the starting point. The binding constraint is usually affordability, meaning what is left after your existing commitments and a stress test at a higher interest rate.
What deposit do I need?
5% is the usual minimum where high loan-to-value products exist, 10% is common, and 20% or more unlocks materially better rates. The jump from 90% to 85% LTV is typically the biggest single rate improvement, so saving a little longer can be worth more than it looks.
What is a stress test?
Lenders check you could still afford the payments if rates rose, often to your rate plus 1 to 3 percentage points, or to a floor set by the regulator. It is why the amount you are offered is usually below the pure income multiple, and it is a genuine protection rather than an obstacle.
What costs are there beyond the deposit?
Legal fees, survey, mortgage arrangement fee, transfer or stamp duty, removals, and whatever the place needs on day one. Budgeting 3–5% of the purchase price on top of the deposit is a reasonable starting assumption, though transfer taxes vary enormously by country.
Is this an offer or a decision in principle?
Neither. It is an estimate based on general lending conventions. Real decisions depend on your credit file, employment type, existing debts, dependants, the property itself and each lender's own model. Get a decision in principle from a lender or broker before making offers.