UK Mortgage Affordability Calculator 2025 - How Much Can I Borrow?

How to Use the UK Mortgage Affordability Calculator

Our mortgage affordability calculator is designed to give you an accurate estimate of how much you can borrow from UK lenders based on current lending criteria updated for September 2025. Follow these steps to get the most accurate results:

Step 1: Enter Your Income Details

Primary Annual Income: Enter your gross annual salary before tax. If you're employed, use your basic salary plus any guaranteed bonuses. For self-employed applicants, lenders typically average your income over the last 2-3 years of accounts or SA302 tax forms.

Second Income (Optional): If you're applying jointly with a partner or spouse, enter their annual income here. Joint applications typically allow you to borrow more as lenders combine both incomes. Some lenders may apply different multiples to the second income (e.g., 4.5x first income + 3x second income).

What Income Counts? UK lenders typically accept: basic salary, guaranteed bonuses, regular overtime (averaged over 6-12 months), commission (averaged over 2-3 years), rental income (usually 75-80% of gross rent), dividends, and certain benefits. Variable income is usually averaged and may be weighted at 50-75% of its value.

Step 2: Specify Your Available Deposit

Your deposit is crucial as it determines your Loan-to-Value (LTV) ratio, which directly affects the interest rates available to you. The larger your deposit, the better rates you'll qualify for:

• 5% deposit (95% LTV): Limited availability, rates typically 5.5-6.5%, mainly for first-time buyers
• 10% deposit (90% LTV): More lender options, rates around 4.8-5.8%
• 15% deposit (85% LTV): Good rate selection, typically 4.5-5.5%
• 20% deposit (80% LTV): Excellent rates, typically 4.2-5.0%
• 25%+ deposit (75% LTV or lower): Best rates available, typically 3.9-4.8%

Tip: If you're a first-time buyer, explore government schemes like the First Homes scheme (30-50% discount) or use a Lifetime ISA (25% government bonus up to £1,000/year) to boost your deposit.

Step 3: Include Monthly Debt Payments

Lenders perform comprehensive affordability assessments that consider all your existing financial commitments. Enter the total monthly payments for:

• Credit card minimum payments (even if you pay in full each month)
• Personal loans and car finance
• Student loan repayments (Plan 1, 2, or 4)
• Other mortgage or buy-to-let commitments
• Maintenance or child support payments
• Any other regular credit commitments

Debt-to-Income Ratio: UK lenders typically prefer your total debt payments (including the new mortgage) to be below 40-45% of your gross monthly income. High debt levels can significantly reduce your borrowing capacity. Use our Debt-to-Income Calculator for a detailed analysis.

Step 4: Choose Mortgage Term and Interest Rate

Mortgage Term: This is the number of years over which you'll repay the mortgage. Common terms are 25, 30, or 35 years. Longer terms mean lower monthly payments but more interest paid overall. Most lenders require the mortgage to be repaid before you reach age 70-75.

Interest Rate: As of September 2025, typical UK mortgage rates are:

• 2-Year Fixed: 4.5-5.5% (best for short-term certainty)
• 5-Year Fixed: 4.8-5.8% (most popular, balances rate and flexibility)
• 10-Year Fixed: 5.2-6.2% (maximum long-term security)
• Variable/Tracker: 5.0-6.0% (follows Bank of England base rate, currently 5.25%)

The calculator uses your chosen rate, but remember that lenders will stress test your affordability at rates 2-3% higher to ensure you can cope with potential rate increases. Compare different rates with our Interest Rates Calculator.

Understanding UK Mortgage Affordability in 2025

Income Multiples: How Much Can You Borrow?

UK lenders typically offer mortgages based on income multiples, with most providing 4 to 4.5 times your annual gross income. However, this varies significantly based on several factors:

• Standard Borrowers (£20,000-£75,000 income): 4-4.5x income is typical
• High Earners (£75,000-£100,000): Some lenders offer up to 5x income
• Very High Earners (£100,000+): Specialist lenders may offer 5.5-6x income
• Professional Mortgages: Doctors, dentists, lawyers, and accountants may access higher multiples (up to 6x) with certain lenders

Example: If you earn £50,000 per year, you could typically borrow £200,000-£225,000 (4-4.5x). With a £50,000 deposit, you could purchase a property worth £250,000-£275,000.

FCA Affordability Rules and Stress Testing

Since the 2014 Mortgage Market Review (MMR), the Financial Conduct Authority (FCA) requires lenders to conduct thorough affordability assessments. This means lenders must verify that you can afford:

• Current Payments: Monthly mortgage payments at the agreed interest rate
• Stress Test Payments: Payments if interest rates increase by 2-3% (typically testing at 7-8% even if your rate is 5%)
• Living Costs: Essential expenses including utilities, food, transport, childcare, and insurance
• Future Changes: Potential life changes like retirement, children, or career changes

This stress testing is why you might be offered less than the maximum income multiple - lenders must ensure you can still afford payments if rates rise significantly.

Special Considerations for Different Applicants

Self-Employed Applicants

Self-employed borrowers face additional scrutiny. Lenders typically require:

• 2-3 years of accounts or SA302 tax forms (some specialist lenders accept 1 year)
• Income is usually averaged over 2-3 years
• Net profit (after expenses) is used, not gross turnover
• Some lenders add back certain expenses like pension contributions
• Contractors may use day rate × weeks worked

Use our specialized Self-Employed Affordability Calculator for more accurate estimates. Learn more in our comprehensive Self-Employed Mortgage Guide.

First-Time Buyers

First-time buyers have access to several advantages and schemes:

• Higher Stamp Duty Threshold: No stamp duty on properties up to £425,000 (vs £250,000 for others)
• First Homes Scheme: 30-50% discount on new-build properties
• Shared Ownership: Buy 25-75% of a property, pay rent on the rest
• Lifetime ISA: 25% government bonus on savings (up to £1,000/year)
• 95% Mortgages: Some lenders offer 5% deposit mortgages specifically for first-time buyers

Calculate your options with our First-Time Buyer Affordability Calculator which factors in these schemes.

Joint Applications

Applying with a partner, spouse, or even a friend can significantly increase your borrowing capacity. Lenders typically:

• Combine both incomes (some apply different multiples to each income)
• Consider both applicants' credit histories (the weaker score can limit borrowing)
• Add all debts and commitments from both applicants
• Require both applicants to be on the property deeds and mortgage

Use our Joint Income Affordability Calculator to see how combining incomes affects your borrowing power.

Maximizing Your Borrowing Capacity

1. Improve Your Credit Score

A better credit score can unlock higher income multiples and better interest rates:

• Check your credit report with Experian, Equifax, and TransUnion (free)
• Register on the electoral roll at your current address
• Pay all bills on time for at least 6 months before applying
• Reduce credit card balances to below 30% of limits
• Close unused credit accounts (but keep oldest accounts open)
• Avoid multiple credit applications in the 6 months before your mortgage application

2. Reduce Existing Debts

Paying off or reducing debts before applying can significantly increase your borrowing capacity:

• Pay off credit cards completely if possible
• Clear or reduce personal loans and car finance
• Consider consolidating multiple debts into one lower payment
• Cancel unused credit cards (lenders consider available credit as potential debt)

Example: Reducing monthly debt payments from £500 to £200 could increase your borrowing capacity by £40,000-£60,000.

3. Increase Your Deposit

A larger deposit not only increases your total property budget but also unlocks better interest rates, reducing monthly payments and improving affordability:

• Save aggressively in the months before applying
• Use a Lifetime ISA for the 25% government bonus
• Consider gifted deposits from family (must be documented properly)
• Sell assets or investments to boost your deposit
• Use Help to Buy ISA or other government schemes

Calculate your deposit needs with our Deposit Calculator and explore savings strategies with our Deposit Savings Calculator.

4. Consider a Longer Mortgage Term

Extending your mortgage term reduces monthly payments, which can help you pass affordability tests:

• 30-35 year terms are increasingly common (vs traditional 25 years)
• Lower monthly payments improve debt-to-income ratios
• You can always make overpayments to reduce the term later
• Most lenders allow 10% annual overpayments without penalties

Trade-off: Longer terms mean more interest paid overall. Compare different terms with our Mortgage Term Calculator.

5. Use a Mortgage Broker

Mortgage brokers can significantly improve your chances of getting the maximum borrowing amount:

• Access to 50-100+ lenders (vs 1 if you go direct)
• Knowledge of which lenders offer higher income multiples for your situation
• Expertise in presenting complex income (self-employed, contractors, multiple income sources)
• Often free (paid by lenders) or charge £300-500
• Can improve your application to maximize borrowing