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Our mortgage affordability calculator helps you to work out how much you might be able to borrow based on your income. It’s designed to give you a quick idea of the likely mortgage you can get. We use income to calculate this because that’s largely how banks and building societies will decide what to lend you. Your spending, credit rating and other factors will also have an impact on how much you can borrow.
Mortgage affordability is the term used when lenders assess whether you can make the monthly repayments on the amount you’re borrowing. Our “How much can I borrow calculator” is designed to give you a quick idea of the likely mortgage amount you can borrow based on your income.
Calculating exactly how much you can borrow depends mainly on your income, but also on a number of things, such as:
Sometimes it can be possible to borrow more than the calculator suggests and that’s where the expertise of a mortgage broker comes in. Our partners at L&C are sometimes able to arrange higher borrowing by taking your own individual circumstances into account.
All potential borrowing is subject to affordability checks and credit status.
Yes. One of the most important factors in determining how much you can borrow is the lender. Each lender has different criteria and L&C brokers who, last year successfully placed mortgages with 59 different lenders, are perfectly placed to match the right lender to your borrowing requirements.
Ordinarily yes, charging up to £500. But, we’ve partnered with fee free mortgage brokers L&C so you get expert advice at no cost.
Not sure how much your mortgage is going to cost you every month? Use our mortgage repayment calculator to get a better handle on the payments you’re likely to face.
The cost of your mortgage depends on several factors, including how much you’re borrowing, your mortgage term, and the rate of interest you’re paying.
Comparing mortgages isn’t easy. Sometimes deals look attractive because they have a low initial rate, but you also need to take into account any fees that come with the mortgage deal. Our mortgage partners, L&C, recommend annual cost as the best way to see which mortgage deal offers the best value for the size of mortgage you’re looking to take.
This is how L&C calculate the annual cost:
By comparing mortgage deals looking at annual cost you can see which one would be cheapest for you taking into account fees as well as the interest rate. The annual cost only applies to the initial deal as its always best to consider switching once the initial deal is over to see if you could save money.
This depends on the type of mortgage you want, your deposit, lender fees and more. Banks and building societies change their mortgage rates quite frequently, so it’s always best to use an expert, fee-free broker to do hard work for you. If you want to get an idea of the best rates available today, see our review of this months best mortgage rates.
If you’re not sure which mortgage deal is likely to be most cost-effective for you based on your individual circumstances, L&C’s expert advisers can run you through the available options to make sure you’re getting the best deal possible.
We have teamed up with L&C to bring you FREE mortgage advice. No hidden costs, just great service. Use the online mortgage finder or speak to an advisor today.
The best advice is to start the process before you start seriously looking for somewhere to buy. Most estate agents and home sellers will expect you to have a mortgage agreement in principle (AIP) when you make an offer. Once you have an offer accepted on a property, you make your full mortgage application.
Yes. A mortgage calculator is a great way to get a quick idea of how much you may be able to borrow, but it’s not as personalised. Your AIP is also a formal document that you can use when you’re considering making an offer on a property. Arrange your AIP today.
If your first decision in principle is refused, it doesn’t mean you can’t get a mortgage with another lender. But, it is important to understand why you didn’t meet the eligibility criteria. Ideally, you would resolve these issues before you try again. Being in the strongest financial position increases your chances of securing the most competitive mortgages.
A mortgage in principle does not guarantee that your application for a mortgage will be accepted. Nor does it make any guarantees about the amount that you can borrow. That’s because the initial checks are limited and the lender doesn’t have a full view of your financial situation.
The exact fees you’ll need to pay will depend on the lender and your circumstances. When you take out a mortgage you can expect to pay on average £1,078 in mortgage costs. Some lenders ask you to pay the fees up front; others add it to the mortgage. See our mortgage fees & costs guide for more detail. Get free mortgage advice from our partners at L&C mortgage brokers.
You can start your mortgage online with L&C’s mortgage finder to see the deals you qualify for and how much you can borrow or speak to an expert adviser at L&C now on 0800 073 2326. They are open 9-8 Mon-Thurs, 9-5.30 Fri, 9-5 Sat, 10-4 Sun.
Lenders typically will lend between 4 and 5 times your annual salary depending on your outgoings and credit history. Other income such as pensions, investments or earnings that fall outside your main salary will also be considered, as well as, the size of your deposit. For more information read our guide, How much can I afford to borrow?
A mortgage lender looks at your income – including the income of anyone you are buying with, as well as, your outgoings to make sure that you can afford the monthly repayments. This includes credit card and loan payments, bills, child care costs, groceries and personal/leisure spending. Lenders also look to see if you will be able to keep up payments should circumstances change: losing your job, falling ill, taking a career break, or mortgage interest rates rising. For more advice, see How to get a mortgage in 6 easy steps.
The same salary multiple of 4-5 times annual income applies but if you’re self-employed, it can be more of a challenge to get a mortgage because you’ll need to prove you have a reliable income. Mortgage lenders will ask for proof of your income for the last two full tax years. You’ll need to show evidence that you’ve had regular work and an income that covers the cost of your mortgage payments.
A mortgage in principle, also known as an ‘agreement in principle’ (AIP), ‘decision in principle’ or ‘mortgage agreement in principle’, is an indication that a lender could lend you a specified amount, based on details you’ve provided about your income, spending and debts. Many estate agents will ask if you have a Mortgage in Principle before you start the home buying process.
If your mortgage is a repayment mortgage you’ll make monthly repayments which cover both the capital you borrowed and the interest due. If it’s interest only you’ll just be paying the interest rather than reducing the amount you owe.
On a repayment mortgage the longer the mortgage term (25, 30, 40 years) you choose the cheaper your monthly payments will be. But you’ll end up paying back more overall. If you choose a shorter term, your monthly payments might be higher, but you’ll reduce the total amount of interest you need to pay back, as you’ll be paying off the loan more quickly.
