Mortgage Affordability Calculator

Before you fall in love with a house, it helps to know what a lender will actually agree to lend you. Our mortgage affordability calculator estimates your borrowing power from your income, existing debts and dependants, and then runs a simplified version of the stress test lenders apply to make sure you could still cope if rates rose.

Income Multiples: The Starting Point

Most UK lenders lend between 4 and 4.5 times your annual income, with some offering up to 5 times for certain professionals — such as those in high-earning, stable professions — or for applicants with a larger deposit. Joint applications use combined income, though lenders may weight a second income slightly differently if it is much lower than the first. Self-employed applicants are usually assessed on an average of the last two or three years’ net profit or salary plus dividends, which is why self-employed multiples in this calculator are set slightly more conservatively.

The Stress Test Explained

Since the financial crisis, UK lenders have been required (under FCA and Bank of England rules) to check that you could still afford your mortgage if rates rose — typically by testing against a rate around 1–3 percentage points above your actual offer, or a fixed floor such as 7–8%. This calculator applies a notional 7.5% stress rate to your estimated loan and checks the resulting payment against roughly 45% of your net monthly income — a rough proxy for the affordability threshold many lenders use. If you fail this test on paper, it does not necessarily mean you are automatically declined, but it flags that your application may need a larger deposit or a longer term to bring the stressed payment down.

What Reduces Your Borrowing Power

Three things commonly shrink the amount a lender will offer, beyond your headline income. First, existing credit commitments — car finance, personal loans, and especially credit card balances even if paid off monthly — reduce disposable income in the lender’s eyes. Second, dependants: children and other dependants increase assumed living costs, which lowers the amount deemed affordable. Third, your employment type: contractors and the newly self-employed (under two to three years of accounts) are often assessed more cautiously, though specialist lenders exist for both.

A Worked Example

A couple earning a combined £62,000, with £150 of monthly credit commitments and one dependant, employed rather than self-employed, might see a typical multiple of 4.5x giving a headline loan of around £279,000. After deducting roughly £18,000 for the debt and dependant reductions, the realistic typical borrowing figure lands closer to £261,000 — a meaningful difference that is easy to miss if you only do the headline multiplication.

Building In a Comfortable Buffer

Lenders will tell you the maximum they are willing to offer, but that figure is not necessarily the amount you should actually borrow. Many financial advisers suggest treating a lender’s maximum offer as a ceiling rather than a target, leaving some headroom below it so that a change in circumstances — reduced hours, a career break, or simply a future interest rate rise at your next remortgage — does not immediately put your mortgage payment out of reach. Running your figures through this calculator alongside our Salary Calculator to check your actual take-home pay gives a fuller picture of what feels comfortable, rather than just what a lender is technically willing to approve.

Frequently Asked Questions