A mortgage affordability calculator that estimates the home price and maximum mortgage you could realistically afford from your income, deposit, other debts and a target housing ratio. For first-time buyers and movers sizing up a budget before talking to a lender or broker.
How it works
The calculator applies two limits and takes the lower. First, an affordability limit: it caps monthly housing spend at your chosen ratio of gross monthly income (income ÷ 12 × ratio), subtracts your other monthly debts, and finds the largest mortgage whose payment fits that budget at your rate and term — using the inverse amortising formula P = M · ((1+r)ⁿ − 1) ⁄ (r(1+r)ⁿ). Second, an income-multiple cap of 4.5× gross annual income, which many lenders impose. The smaller of the two is your maximum mortgage; adding your deposit gives the affordable home price, and the mortgage divided by the price gives the loan-to-value. The tool flags when the 4.5× cap, rather than monthly affordability, is the binding limit.
Example
Gross income £60,000, other debts £300/month, deposit £40,000, rate 5% over 25 years, housing ratio 36%:
- Monthly housing budget: £60,000 ÷ 12 × 36% = £1,800, minus £300 debts = £1,500 for the mortgage
- That payment supports a mortgage of about £257,000, but the 4.5× cap limits borrowing to £270,000, so affordability binds here at £257,000
- Affordable home price: about £297,000, at roughly 86% LTV
| Income | Deposit | 4.5× cap | Likely max borrowing |
|---|---|---|---|
| £40,000 | £25,000 | £180,000 | ~£180,000 |
| £60,000 | £40,000 | £270,000 | ~£257,000 |
| £90,000 | £60,000 | £405,000 | ~£385,000 |
It is a guidance estimate and runs entirely in your browser.
How lenders actually think about affordability
Banks and building societies do not just run the arithmetic above. They apply additional tests that can move your limit in either direction:
Stress testing
Most regulated lenders in the UK must verify that you could still afford repayments if interest rates rose by a specified amount above your initial rate. During periods of low rates, this stress test often became the binding constraint rather than the raw payment ratio. When market rates are already elevated, the stressed rate may be less punishing.
Credit history and commitments
A clean credit history lets you access the full multiple; a thin file, recent defaults, or credit utilisation above roughly 30% can cause lenders to apply a lower income multiple even if your raw numbers look healthy. Committed spending — childcare, school fees, standing orders — is also factored in beyond just the headline debt payments you enter here.
Joint applications
For joint applications the income multiple typically applies to total combined household income. However, some lenders cap their multiple differently for joint applications than for sole applications. This calculator uses a flat 4.5× — for joint applications, enter combined gross income.
What affects how much you can borrow more than the rate
Counterintuitively, the interest rate has less effect on the maximum mortgage than most borrowers expect, because higher rates reduce both the payment capacity and the loan size simultaneously. The factors with the largest single impact on your borrowing limit are:
- Income — the binding constraint for most buyers
- Other debts — each £300/month in debt payments typically reduces your mortgage capacity by around £50,000–£60,000
- Deposit — does not change the maximum mortgage directly, but determines LTV and therefore rate tier
- Term — a 35-year mortgage versus a 25-year term meaningfully increases the loan a given payment can sustain
Building equity faster while staying affordable
If you are at the edge of your affordability range, a slightly longer term (30 or 35 years) keeps monthly payments manageable now while leaving room to make overpayments when income grows. Many mortgages allow overpayments of up to 10% of the outstanding balance per year without penalty — a useful structural option to build equity ahead of schedule without committing to higher mandatory payments from day one.