£
Find out how much you can afford to borrow, and the maximum property price you can buy, based on your income and the deposit you have saved.
Good: Your savings (£40,000) cover the deposit and the buying costs (roughly 10% on top).
The four things lenders weigh up when working out your mortgage affordability
Your net (take-home) monthly income – on your own or combined with a partner – is where the calculation starts. Lenders apply a maximum share of income to the mortgage payment, and they also cap the loan at an income multiple, typically around 4.5 times your annual income (the loan-to-income limit set by the regulator). If you buy jointly, both incomes are added together.
Car finance, personal loans, credit cards and any other monthly commitment are counted alongside the mortgage when a lender works out how much you can afford. The more you already pay out each month, the smaller the mortgage they will offer you.
Use the rate you have actually been quoted. Lenders are required to apply a stress test, checking that you could still cover the payment if your rate rose by around 1-3 percentage points: on a variable or tracker deal the rate can move.
A longer term lets you borrow more for the same monthly payment, but it also means more interest over the life of the loan. UK terms commonly run 25-35 years, and your age matters too: most lenders want the mortgage repaid by the time you are 70-75 (term + age within their limit).
Advisers suggest keeping the mortgage below 30% of your net income, even though lenders may stretch to 35% or apply income multiples up to 4.5x. The extra headroom protects you against rate rises, unexpected bills or a temporary drop in income.
If you take a variable or tracker rate, run your payment at 2-3 percentage points higher to be sure you could still afford it in a worse scenario. Never borrow the absolute maximum without that check.
Plan for more than the deposit alone: on top of the 20% deposit, keep a cushion of roughly 10% of the price for Stamp Duty, conveyancing, a survey and moving costs. A bigger deposit also unlocks lower LTV bands and cheaper rates.
The table below shows the maximum mortgage and an indicative property price for different levels of net monthly income, worked out over a 25-year term at a 4.5% interest rate. The figures are estimates based on the affordability ratios lenders typically use in the UK.
Important: Don't stretch to the maximum your lender will allow. Advisers suggest keeping to about 30% of your income so you have headroom for the unexpected, for rate rises on a variable deal, or for a temporary loss of earnings. The biggest mortgage you can get approved is rarely the right one for you.
Official guidance: The government-backed MoneyHelper service and the Bank of England publish affordability tools and guidance on the rules and risks before you take out a mortgage. It is worth checking them before you commit to a purchase.
Your borrowing capacity is the maximum property price you can realistically afford. It is driven by two things: your monthly income (which caps the payment you can take on) and your savings (which have to cover the deposit and the buying costs). The MoneyHelper service offers free guidance to help you understand what lenders look for.
This calculator weighs up both factors and tells you which is the real limit on your budget: if you could afford more than your savings allow, you need a bigger deposit. If you could put down more than your income supports, it is your income (the affordable payment) that holds you back.
Max payment = Net income x Affordability ratio (30-35%)
Max mortgage = Payment x [((1+i)^n - 1) / (i x (1+i)^n)]
Max price (income) = Max mortgage / 0.80
Max price (savings) = Savings / 0.30
By income (35% ratio, 4.5% rate, 25 years):
By savings (30% needed):
Real maximum price: £133,333 (limited by savings)
To buy comfortably you want around 30% of the price in cash. The mandatory costs in the UK are usually lower than that, so the figure is deliberately prudent – it builds in a 20% deposit plus a cushion for Stamp Duty, fees and a contingency. Roughly, the money splits up like this:
Stamp Duty is charged differently in each part of the UK, and it can make a real difference to the cash you need. First-time buyers get generous relief in all three systems:
0% up to £125,000, 2% to £250,000, 5% above. First-time buyers: 0% up to £300,000.
0% up to £145,000, then rising bands. First-time buyer relief to £175,000.
0% up to £225,000 for main residences, then rising bands.
Every extra £10,000 saved lets you buy a home worth roughly £33,000 more – and a lower LTV often unlocks a cheaper rate. Save before you start house-hunting.
Pay off personal loans, car finance and credit cards before you apply. They eat into the affordability margin a lender will give you.
Two applicants combine incomes and savings, which can almost double your borrowing capacity compared with buying on your own.
First-time buyers can look at a Lifetime ISA (25% government bonus on savings), shared ownership, or a mortgage guarantee scheme that accepts a 5% deposit.
A longer term lowers the monthly payment and lifts your capacity. The trade-off is that you pay more interest overall.
After completion you will need money for moving, possible repairs and an emergency fund (3-6 months of outgoings). Never put 100% of your savings into the deposit and costs.
Disclaimer: This calculator gives an indicative estimate. The final terms of your mortgage (interest rate, term, LTV band, fees) depend on each lender and on your individual credit profile and affordability assessment.
We answer the most common questions about how much mortgage you can get
Other tools to plan your home purchase