Mortgage Affordability Calculator UK 2026 — How Much Can You Borrow?
How much a lender will offer you depends primarily on your income, outgoings, credit history, and the deposit you can put down. Most lenders use income multiples of 4 to 4.5 times your gross annual income, subject to a stress test at higher rates. This calculator estimates your maximum borrowing, monthly payments, and whether you need Help to Buy or Shared Ownership.
Lenders vary in their income multiples and stress tests. This is an estimate — use a whole-of-market mortgage broker for precise figures. First-time buyers: no SDLT on first £300,000 (properties up to £500,000). Stress test: lenders check affordability at current rate + 3%.
How Lenders Calculate Maximum Borrowing
The income multiple is the starting point, but it is not the whole picture. Lenders then run an affordability assessment that deducts your monthly committed outgoings (minimum credit card payments, loan repayments, car finance, student loan deductions) from your net income and checks whether the mortgage payments pass their stress test on what is left. The result is often lower than the raw income multiple suggests.
| LTV | Deposit needed | Typical rate tier | Notes |
|---|---|---|---|
| 95% LTV | 5% | Highest rates | Mortgage Guarantee Scheme available for FTBs |
| 90% LTV | 10% | Good rates | Wide lender choice; most FTBs target this |
| 85% LTV | 15% | Better rates | Significant improvement over 90% |
| 75% LTV | 25% | Best standard rates | Widest choice, lowest rates at this tier |
| 60% LTV | 40% | Premium rates | Best rates in the market |
What Counts as Income?
Different lenders treat income sources differently. Basic salary is universally accepted. Bonuses and commission: some lenders use 100%, others use 50% or average last 2 years. Overtime: typically 50-100% if regular. Self-employment income: usually 2-3 years of accounts/SA302s, using the lower of net profit or salary+dividends. Benefits: some lenders accept Child Benefit and other benefits as income. Rental income (for buy-to-let): typically 125% of mortgage payment must be covered by rent.
First-Time Buyer Support Schemes
- Lifetime ISA — save up to £4,000/year, get 25% government bonus (max £1,000/year) for first home purchase up to £450,000
- Mortgage Guarantee Scheme — government guarantees part of 95% LTV mortgages, encouraging more lenders to offer them
- Shared Ownership — buy a share (10-75%) of a property and pay subsidised rent on the rest; allows purchase with a smaller deposit
- First Homes — discount of at least 30% on new build homes for first-time buyers and key workers in England
How Your Credit Score and History Affect Affordability
Beyond income multiples and outgoings, lenders scrutinise your credit history closely before deciding not just whether to lend, but how much and at what rate. Missed payments, defaults, County Court Judgments, or a history of high credit utilisation can all reduce the amount a lender is willing to offer, or push you towards specialist lenders charging higher rates than the mainstream market. It's worth checking your credit report with all three main UK credit reference agencies (Experian, Equifax, and TransUnion) several months before applying, since each lender may pull from a different agency and reports can occasionally contain errors worth correcting in advance. Simple habits — registering on the electoral roll at your current address, keeping credit utilisation low relative to your limits, and avoiding new credit applications in the months before a mortgage application — can meaningfully improve how lenders assess you, sometimes shifting you from a specialist lender's higher rate onto a mainstream deal.
Stress Testing — Why Affordability Isn't Just About Today's Rate
UK mortgage lenders are required to "stress test" affordability, meaning they check whether you could still afford your repayments if interest rates rose significantly above the rate you're actually being offered — typically around 1 percentage point above the lender's standard variable rate, though the exact stress rate varies by lender and by product type. This is why your maximum borrowing amount is often lower than a simple income-multiple calculation would suggest, particularly if you have other regular financial commitments such as car finance, personal loans, or high childcare costs, since all of these reduce the income available to absorb a hypothetical rate rise. This stress testing exists specifically to prevent a repeat of widespread mortgage defaults if interest rates increase after you've taken out the loan, protecting both borrowers and the wider financial system.
Frequently Asked Questions
No. A mortgage in principle (also called an agreement in principle or decision in principle) is a statement from a lender that they would be willing to lend you a certain amount, subject to full application checks. It typically involves a soft or hard credit search. It is not a binding offer. The full mortgage offer comes after the lender has completed a full application, valuation of the property, and final underwriting checks.
A whole-of-market mortgage broker can access deals from most lenders, including some not available directly, and will handle the application process. They are particularly valuable if you have complex income, adverse credit, or unusual property types. Some brokers charge a fee (typically £300–£500); others are fee-free and take commission from lenders. Going direct to a lender limits you to their products only and you may miss better deals elsewhere.
Yes, indirectly. Lenders don't see your outstanding student loan balance as a debt in the way they see a personal loan or credit card, but they do factor in the monthly deduction taken from your salary if you're still repaying, since this reduces your available net income for affordability purposes. If your student loan has already been written off or you've finished repaying it, it has no bearing on your mortgage application at all.
Yes, 95% loan-to-value mortgages (a 5% deposit) are available from a range of lenders, particularly with the government's Mortgage Guarantee Scheme encouraging more lenders into this space. Rates on 95% LTV deals are generally higher than lower-LTV products, since the lender is taking on more risk, and your choice of lenders and products narrows the higher your loan-to-value ratio. Some specialist schemes, including certain shared ownership and First Homes purchases, can allow an effective deposit of significantly less than 5% of the full market value.