Figuring out how much mortgage can I afford is one of the most important questions anyone looking to buy a home in the UK asks themselves. It’s not just about what a bank or building society might be willing to lend you; it’s also about thinking about how much you can comfortably manage to pay every month alongside all your other living expenses without stretching yourself too thin.

This guide will break down some of the key factors that determine mortgage affordability from a lender’s perspective and, importantly, how you can assess your own comfort level to arrive at a realistic figure to answer the question: “How much mortgage can I afford?”.

 

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What lenders typically look at

UK mortgage lenders conduct detailed affordability assessments to make sure you can reliably meet your mortgage repayments across the entire period of the mortgage. Think of this as their way of answering “how much mortgage can I afford” from a risk perspective. This almost always goes beyond a simple calculation based on your salary.

Key elements they look at include:

Your income

Your gross annual income is the foundation of any affordability calculation. Lenders will want to see evidence of stable and consistent earnings. While you might hear about income multiples (e.g. lenders offering 4 to 4.5 times your salary) these are only a very rough initial guide and never a guarantee. The type of income also matters; a regular PAYE salary is often viewed differently to income from self-employment, contracting, bonuses or overtime which may require more extensive proof and averaging over several years.

Check out our guide: What can I get with my salary?

Your outgoings

Lenders meticulously review your regular monthly outgoings and committed expenditure to understand your disposable income. This can include:

  • Existing debt repayments (like credit card balances, personal loans, car finance)
  • Childcare costs
  • Essential bills (council tax and utilities – often based on national averages or your estimates)
  • Travel and commuting costs
  • School fees, pension contributions or other regular financial commitments
  • Sometimes even significant subscriptions or regular lifestyle expenses

The higher these outgoings the less disposable income you have available for mortgage payments.

The size of your deposit

The size of your deposit directly affects the amount you need to borrow (your Loan-to-Value ratio or LTV). A larger deposit means a smaller loan which generally translates to:

  • Lower monthly mortgage payments
  • Access to more competitive interest rates making the mortgage more affordable

Your credit history

A good credit history with a healthy credit score can unlock lower interest rates from lenders. Lower rates mean lower monthly payments making the mortgage more affordable. Conversely, a poor credit history can limit your options and lead to higher rates increasing your monthly costs.

Find out more with our guide – what credit score do you need to buy a house?

“Stress testing” your affordability

Lenders will also “stress test” your ability to afford the mortgage payments if interest rates were to rise significantly from their current level. This ensures you could still manage repayments if borrowing costs increased during your mortgage term.

Assessing your own comfort levels

It’s always important to remember that the amount a lender says you can borrow isn’t necessarily the amount you should borrow or can comfortably live with. Figuring out how much mortgage can I afford is also a deeply personal calculation based on your own budget, lifestyle and future plans.

Create a detailed personal budget

When first thinking about how much mortgage can I afford, try to go beyond what a lender might ask for. Track all your monthly income and expenditure including discretionary spending like holidays, hobbies, entertainment and savings contributions. This will give you a true picture of what you can realistically allocate to a mortgage payment without sacrificing your quality of life.

Consider future plans and financial goals

Alongside thinking about your personal budget, try to think about any upcoming life changes or financial goals. Are you planning to start a family, change careers or undertake home improvements? Will your desired mortgage payment still be manageable alongside these future plans?

Don’t overstretch yourself

Borrowing the absolute maximum a lender offers might mean you secure a larger property but it could also leave you “house poor” – a situation where so much of your income is spent on paying your mortgage every month that you have little left for anything else. This can cause significant financial stress. Aim for a mortgage payment that allows you to live comfortably, save for the future and handle unexpected expenses.

Tools to help you estimate how much mortgage you can afford

Several different tools can help you get a better understanding of how much mortgage can I afford:

Online mortgage affordability calculators

Many websites including OneDome offer free online tools. These calculators typically ask for details about your income, deposit, existing debts and some outgoings to provide an initial estimate of your borrowing potential and affordability. They are a good starting point.

Get started with our mortgage calculator here

Mortgage in Principle

This is a more personalised assessment from a specific lender. It involves providing more detailed information and often a soft credit check (which doesn’t affect your score). A mortgage in principle will give you a clearer indication of how much that lender might be willing to lend you which is a crucial step in determining how much mortgage can i afford from a practical application perspective.

Speaking to a mortgage advisor

A qualified whole-of-market mortgage advisor can provide a comprehensive assessment of your affordability across numerous lenders. They can help you understand complex lender criteria, advise on comfortable borrowing levels and find suitable mortgage products tailored to your situation.

Find out where you can find a mortgage broker here

Key takeaways for determining your affordability

To summarise how to approach the important question: “How much mortgage can I afford?”:

  • Affordability is much more than just your salary; it’s a holistic view of all your finances.
  • Lenders scrutinise your income outgoings, existing debts and credit history.
  • Your personal budget comfort level and future plans are just as important as what a lender will offer.
  • Use online calculators, get a Mortgage in Principle and consider professional advice for a realistic picture.
  • A larger deposit generally improves affordability by reducing the loan amount and potentially securing better interest rates.

OneDome is here to help

Choosing a mortgage is complex but OneDome is here to help. If you have any questions about the specifics of mortgages, the wider mortgage process or want tailored advice on the different types of mortgages that suit your situation you can:

Important: Your home may be repossessed if you do not keep up repayments on your mortgage.