How Mortgage Lenders Assess Affordability

Income Multiple

Most lenders use 4–4.5× your gross annual salary as the starting point. Some specialist lenders offer up to 5.5× income for certain professions (doctors, solicitors, accountants). Joint applications use combined income.

Stress Testing

Lenders stress-test your mortgage at 3% above the current rate to ensure you could afford payments if rates rise. This often limits borrowing below the headline income multiple. Large credit card debts or car finance reduce affordability significantly.

Deposit Size Matters

A 10% deposit (90% LTV) is the minimum for most lenders. 15% (85% LTV) opens better rates. 25% (75% LTV) unlocks the best deals. Each 5% increase in deposit typically saves 0.3–0.5% on the mortgage rate — worth calculating over a 25-year term.

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