Mortgage affordability calculator
Enter one or two yearly incomes, any monthly debt payments and your deposit. The calculator shows the loan that a few example multiples of income give, the price range once your deposit is added, and the monthly payment at an interest rate you choose.
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What the calculator assumes
- Each income is a yearly figure before tax. With two applicants, the calculator adds the two incomes together.
- The multiples of income are examples. Lenders set their own, and the one a lender uses for you can be higher or lower.
- The price range is the loan at each multiple plus the deposit you enter. Stamp Duty, legal fees and moving costs are not taken off the deposit.
- The monthly payment is for a repayment mortgage at the rate and term you enter, with the rate fixed for the whole term.
Income multiples
A quick way to size a mortgage is to multiply yearly income by a set number. Many lenders start from a figure of this kind, and the calculator shows the loan at three example multiples so you can see the spread. For a joint mortgage the multiple applies to both incomes added together.
A multiple is a starting point only. Two people with the same income can get very different answers, because what they spend each month and what they already owe are different.
What lenders also look at
The Financial Conduct Authority says lenders look at the money you have coming in and the money you have going out, to judge whether you can keep up the repayments. They usually ask for proof of income, recent bank statements and proof of your deposit, and they can ask about the rent you have been paying.
Regular debt payments, such as a car loan or a credit card, reduce what is left each month for a mortgage. The FCA Handbook says a lender should check the credit commitments you tell it about, for example with a search at a credit reference agency or by looking at your statements. The monthly debts you enter are a reminder that these payments count.
In many cases a lender also checks whether you could still pay if interest rates rose. The FCA calls this a stress test, and it is one reason a lender can offer less than a simple multiple suggests.
From loan to price
The price range adds your deposit to each loan figure. A larger deposit raises the price range without changing the loan, and the mortgage then covers a smaller share of the price.
The deposit is not the only cash a purchase needs. The Stamp Duty calculator works out the tax on a price in England or Northern Ireland, and the house deposit calculator shows how long saving a deposit could take.
What it leaves out
- How a given lender treats bonuses, overtime, self-employed income or benefits.
- Your credit record and your spending on bills, childcare and other costs.
- Lender fees, the lender's valuation of the home and limits on the share of the price a lender will cover.
To compare a mortgage payment with renting, the rent affordability calculator uses the same kind of income test from the letting side. The take-home pay calculator turns a salary into the monthly figure that reaches your account.
Official guidance
- Support available for mortgages as interest rates rise on the Financial Conduct Authority
- MCOB 11.6: responsible lending in the FCA Handbook
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