Home Affordability Calculator
Estimate how much property you can afford based on your income, deposit, and monthly outgoings.
What this calculator does
This affordability calculator turns your income into a realistic property price. Enter your annual gross income, your existing monthly commitments, the interest rate you expect, and the deposit you intend to put down, and it returns the maximum monthly repayment you can reasonably support, the mortgage that repayment sustains, and the property price that follows.
It also shows a table across different deposit percentages, which matters more in the UK than the headline figure. Because lenders price in loan-to-value bands, an extra few thousand pounds of deposit that crosses a band boundary can improve your rate and therefore raise what the same monthly repayment will buy.
When to use it
Run it before you book viewings, so your search filter reflects your budget rather than your optimism. Run it again before an agreement in principle, so you can tell whether a lender's offer is generous or merely reflects a higher income multiple than you are comfortable with.
It is particularly useful when weighing a car finance settlement against adding to the deposit, and when deciding whether to wait a year. If the number it produces sits below the realistic entry price in your area, that is a clear signal to keep renting, keep saving, and revisit — the calculator has answered the question honestly, which is more useful than a stretch.
Understanding the inputs
Annual gross income is your salary before tax and National Insurance. Include regular overtime, bonus, or commission only if you can evidence it across two or three years of payslips, since that is what lenders will ask for. If you are self-employed, use the average of your last two or three years of net profit or salary plus dividends.
Monthly commitments should reflect contractual minimums on credit and finance agreements. Interest rate should be a live product rate rather than the Bank of England base rate, and remember the deal typically fixes for two to five years before reverting to the standard variable rate. Deposit is entered as a percentage — test figures either side of the 90, 85, 80, and 75 percent LTV boundaries.
How is this calculated?
Max monthly payment = 28% of gross monthly income minus monthly debts. Back-calculate loan amount from that payment.
A worked example
Take someone earning £65,000 with £300 a month of car finance, quoted 5.25 percent over a 25-year term, with a 10 percent deposit. Gross monthly income is about £5,417, so the 28 percent housing figure is roughly £1,517. Deducting the car finance leaves about £1,217 a month for the mortgage.
At 5.25 percent over 25 years, £1,217 supports a mortgage of roughly £203,000, implying a property around £225,600 with a deposit of about £22,600. A lender applying a 4.5 times multiple would lend up to £292,500 on the same income — around £90,000 more. Stretching to that ceiling would push the repayment past £1,750 a month, and the stress test at 7 percent would push the assessed figure higher still.
Limitations and assumptions
This models the repayment only. It excludes stamp duty, conveyancing, searches, a survey, removals, and any product or arrangement fee, which together commonly reach £8,000 to £12,000 on a mid-priced purchase and must come from cash rather than the mortgage. It also excludes buildings insurance, ground rent and service charges on leasehold property, and maintenance.
It does not replicate a lender's affordability model, which examines your bank statements, credit file, dependants, and childcare costs, and applies a stress test at a rate well above the one you enter. Leasehold flats with high service charges and short leases can be declined outright regardless of income. Use this for the shape of your budget, then get an agreement in principle for a figure a lender will stand behind.
Common Questions
- How do UK lenders actually decide what I can borrow?
- Primarily by an income multiple, then by affordability. Most lenders cap lending at 4.5 times income, with a minority stretching to 5.5 times for higher earners or certain professions. On top of that sits an affordability assessment of your real spending, and a stress test checking you could still pay if rates rose.
- Why is this figure lower than 4.5 times my salary?
- Because this calculator works from a payment you can comfortably carry — 28 percent of gross income less existing commitments — rather than from a lending cap. On a £65,000 income the 4.5 multiple gives £292,500, while the payment-based approach at 5.25 percent over 25 years gives roughly £203,000. The gap is your margin of comfort.
- What is the mortgage stress test?
- Lenders must check you could still afford repayments if rates rose. In practice most test at your reversion rate plus one percentage point, or a floor of around 6 to 8 percent, whichever is higher. That is why a deal advertised at 4.5 percent may be assessed at 7 percent when your maximum loan is calculated.
- What counts as a monthly commitment?
- Credit card minimums, personal loans, car finance including PCP, Buy Now Pay Later balances, student loan deductions, and child maintenance. Plan 2 student loan repayments of nine percent above the threshold can be substantial for higher earners. Childcare costs are not debt but most lenders deduct them from affordability anyway.
- How does my deposit change what I can buy?
- Twice over. It adds directly to the price, and it moves your LTV, which changes the rate you are offered. Lenders price in bands at 95, 90, 85, 80, 75, and 60 percent LTV. Crossing from 90 to 85 percent can shave a quarter point or more off the rate, raising affordability again.
- Does this include stamp duty and legal fees?
- No. The result is the mortgage repayment only. On a £300,000 purchase a home mover pays £5,000 in stamp duty, plus roughly £1,500 to £2,500 for conveyancing, searches, and a survey. Budget those separately from your deposit — they cannot be added to the mortgage.
- Can I borrow more with a joint application?
- Usually yes, though not simply double. Lenders typically apply the multiple to combined income, so two people on £40,000 each can often borrow around 4.5 times £80,000. Both credit files are assessed and both sets of commitments are deducted, so a partner with significant car finance can reduce the total.
- Do gifted deposits affect affordability?
- They increase your deposit without affecting income, so they raise the price you can reach and can drop you into a better LTV band. Lenders require a signed letter from the giver confirming the money is a gift with no repayment expected and no stake in the property, plus proof of source of funds.
- Should I borrow the maximum I am offered?
- Consider what happens at the end of your fixed deal. A two-year fix at 4.5 percent reverting to an SVR near 7.5 percent adds hundreds of pounds to a stretched repayment. Leaving headroom in the calculation is how you avoid being forced into a longer term or a product transfer on poor terms.
Related calculators
- Mortgage Deposit CalculatorCalculate how much deposit you need and how long it will take to save for your home purchase.
- Mortgage CalculatorCalculate your monthly mortgage repayment, total interest paid, and full amortisation schedule.
- Debt to Income Ratio CalculatorCalculate your debt-to-income ratio to assess loan affordability.