Advanced options
Lenders assess affordability on income, outgoings, credit commitments and stress-tested rates, not multiples alone, so treat this as a starting range. Not financial advice; your home may be repossessed if you do not keep up repayments on your mortgage.
What The Mortgage Affordability Calculator Works Out
- Typical property budget: joint annual income multiplied by 4.5, plus your deposit. Most UK lenders sit between 4 and 4.5 times income; 5 times or more is available to higher earners, certain professions and through some first-time buyer schemes.
- Likely range: the same sum at 4x and 5x income, which brackets what the majority of mainstream lenders would offer on multiples alone.
- Loan to value at budget: the loan as a percentage of the purchase price. Each 5% step down (90%, 85%, 80%) usually unlocks a cheaper rate band, so a slightly bigger deposit can cut the monthly cost twice over.
- Income multiple (advanced): choose the multiple your lender is likely to use. 4x is cautious, 4.5x is typical, 5x to 5.5x needs a strong credit profile, high income or a professional mortgage.
- Monthly commitments (advanced): loans, car finance, credit card minimums, childcare and maintenance. Lenders deduct these from income before applying the multiple, so GBP 300 a month of commitments removes roughly GBP 16,000 of borrowing at 4.5x.
- Maximum loan to value (advanced): the biggest mortgage the lender allows as a share of the price. At 95% LTV you need a 5% deposit, so GBP 30,000 stretches to at most GBP 600,000 regardless of income. The deposit-limited budget shows this cap.
- Estimated monthly repayment (advanced): the standard repayment-mortgage formula using your rate and term. A 25-year term is the traditional default; 30 to 35 years is now common and lowers the payment but raises total interest.
- Stress-tested repayment (advanced): the same loan at a higher rate. Lenders test affordability at roughly 1% to 3% above the reversion rate (often 7% to 8% in total) to check you could still pay if rates rose.
- Repayment as % of gross income (advanced): annual repayments divided by joint income. Below 30% is comfortable; most lenders become cautious above 35% to 40% once other commitments are included.
- Deposit needed for 90% LTV (advanced): 10% of your budget, as a target if you are close to the next rate band. A decision in principle from a lender or whole-of-market broker gives a real figure within a day and needs only a soft credit check.