Mortgage Affordability Calculator

UK mortgage lenders typically offer 4 to 4.5 times your annual income, though some stretch to 5.5 times for high earners with minimal outgoings. The multiple is only the starting point. Affordability is assessed on your ability to meet payments if interest rates rise, and on what your income actually has to cover: council tax, utilities, food, transport and childcare, alongside existing debts, the number of dependants and your credit score. A single applicant on £40k might be offered £160-180k, while a couple jointly earning £70k might see £280-315k.

Lenders also check whether you could keep paying if rates rose, usually by testing at 1-3 percentage points above the product rate or at their reversion rate. The Bank of England's fixed 3-point stress test was withdrawn in August 2022, and the FCA now leaves the test rate to each lender, requiring the check only on deals fixed for less than 5 years. With the average two-year fix at 5.73% and the five-year at 5.78% (Moneyfacts, September 2026), a two-year deal might be tested at roughly 6.7-8.7%, which is the usual reason an offer comes in below what the headline multiple suggested.

Joint applications pool both incomes, and lenders normally count 100% of each salary. How you then hold the property is a separate decision. Joint tenancy, the usual choice for couples, means both of you own the whole of it with an automatic right of survivorship. Tenants in common splits ownership into defined shares, perhaps 60/40, each of which can be left independently in a will, which is why it suits unmarried couples and second marriages. Some lenders will take up to 4 applicants on one mortgage, and guarantor arrangements let parents back the loan without taking ownership.

Existing debts reduce what you can borrow, and they do it more sharply than most people expect. Every £100 a month of committed payments removes roughly £16,000 of borrowing capacity at the current average two-year fixed rate of 5.73% over 25 years, because that is the loan £100 a month would otherwise repay. On the same basis a car on PCP at £400 a month costs you about £64k of mortgage, and nursery fees of £1,500 a month can cost about £240k. A rail season ticket at £6k a year counts against you too, and many lenders now include pet costs at around £100 a month. This calculator applies your income multiple, deducts monthly commitments on that basis, caps the loan at 95% loan-to-value and shows the monthly payment at the current average rate.

Self-employed applicants are judged on documented profit rather than turnover. Sole traders usually need 2-3 years of Self Assessment SA302 forms, averaged out. Limited company directors are normally assessed on salary plus dividends, though a few lenders will look at retained profits. Day-rate contractors are often assessed as day rate multiplied by 5 and then by 46 weeks. With under 2 years of trading you are into specialist territory, with lenders such as Kensington and Pepper Money at rates of 5.5-7%. Stability counts for more than size here, because fluctuating profits average down.

Several things genuinely move the number. Paying down credit cards and overdrafts frees capacity pound for pound. Deferring non-essential car finance until after completion works for the same reason. Credit scores improve with electoral roll registration, lower card utilisation and no recent applications. Doctors, lawyers and accountants can reach professional mortgages at 5-5.5 times income from some lenders. A larger deposit does two jobs at once, since 25% or more brings the best rates within reach and stretches affordability further.

Lenders increasingly verify spending through Open Banking rather than trusting statements you download yourself, so the 3-6 months before you apply are the ones that count. Fewer takeaways, no betting and no payday loans is crude advice, but it is accurate. On the deposit side, first-time buyers can get in at 5%, 10-15% opens up materially better pricing, and the sharpest rates sit at 60% LTV. On a £250k property that means £12,500, £25,000 or £50,000 for a 5%, 10% or 20% deposit. A Lifetime ISA takes up to £4,000 a year of your own money and adds a 25% government bonus worth £1,000 a year.