Mortgage Affordability Calculator
Your home could be repossessed if you don’t keep up repayments on your mortgage
Mortgage Affordability Calculator
Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.
Get expert advice from Ascot Mortgages if…
- You need to borrow more than 4.5 times your annual income
- You are only using one income on your application
- You earn income through sources such as Benefits, Commission or Rental income
- You consider yourself to be on ‘low’ income
If one or more of the above apply to you, it’s important to get expert advice before making an application. The right broker can help maximise your chances of approval based on your circumstance.
What is a Mortgage Affordability Calculator?
A Mortgage Affordability Calculator is an online tool designed to help prospective homebuyers estimate how much they can afford to borrow for a mortgage based on their income. This tool simplifies the initial stages of the mortgage application process by providing an insight into the amount a lender might be willing to offer, based on the input of the applicant’s full salaries. It calculates potential borrowing amounts by applying different multipliers to the household income, reflecting the varying criteria of mortgage providers. The results give an indication of what could be borrowed under standard conditions, as well as what might be possible through the use of a mortgage broker to access specialist lenders.
How to Use our Mortgage Affordability Calculator
Our Mortgage Affordability Calculator is straightforward to use, designed to provide quick estimates with minimal input. Here’s how to get started:
Input Your Income: Begin by entering the total annual income for all applicants. This figure should be the gross amount, before tax and other deductions.
Review Your Results: Once you’ve inputted the income, the calculator will display your estimated results, including:
- The maximum amount you could potentially borrow.
- The amount most lenders would consider offering you.
- Higher amounts that might be accessible with the help of a mortgage broker.
Example: What mortgage can I afford on £30k salary?
- Your Income: £30,000
- Your Results:
- You could borrow up to £165,000: This figure represents the upper limit of what might be possible under specific circumstances, usually requiring the assistance of a mortgage broker.
- Most lenders would consider letting you borrow £135,000: This is calculated at 4.5 times your household income, a standard multiplier used by the majority of mortgage providers.
- Some lenders would consider letting you borrow £142,500: At 4.75 times your household income, achieving this multiplier might be more challenging without a broker’s help. It’s not as widely available for direct applications.
- A minority of lenders would consider letting you borrow £165,000: This requires a multiplier of 5.5 times your household income and is typically accessible only under very specific conditions, often necessitating a broker’s expertise.
Your Estimated Mortgage Affordability
Take a look at the table below to see how much you might be able to borrow based on different salary levels:
| Your Salary | 4.5x income | 4.75x income | 5.5x income |
|---|---|---|---|
| £20,000 | £90,000 | £95,000 | £110,000 |
| £30,000 | £135,000 | £142,500 | £165,000 |
| £40,000 | £180,000 | £190,000 | £220,000 |
| £50,000 | £225,000 | £237,000 | £275,000 |
| £60,000 | £270,000 | £285,000 | £330,000 |
It’s important to note that lenders typically offer loans based on a multiple of your annual income depending on your profession, credit score and personal financial circumstances, including existing debts and outgoings.
Your Affordability as a First-Time Buyer
As a first-time buyer, understanding your mortgage affordability is an important step in the home-buying process. Your salary is a big part of the equation, but lenders will also assess your outgoings, any existing debts you may have, credit card payments, and other financial commitments. You can improve your borrowing potential by having a good credit score, a stable job, and a large deposit.
Getting onto the property ladder as a first-time buyer can feel challenging. The good news is, there are a number of government schemes that you may be eligible for that can help you on your home-buying journey.
First Homes Scheme
The First Homes scheme is available for first-time buyers who are looking to buy a home in England. This scheme gives you the opportunity to buy a home for 30% to 50% less than its market value. In order to be eligible for this scheme, you must be at least 18 years old, a first-time buyer, able to get a mortgage for at least half the price of the property, and you must not earn more than £80,000 a year before tax, or £90,000 if the property is in London.
When you purchase a home through this scheme, developers will offer the property to first-time buyers with at least 30% of the market value deducted from the price. New build homes purchased under this scheme cannot cost more than £250,000, or more than £420,000 if it is in London.
Lifetime ISA
A Lifetime ISA (Individual Savings Account) can help you buy your first home, or to save for later in life. This scheme allows you to save £4,000 each year, up until you turn 50 years old. You must be at least 18 years old, a UK resident, and you will need to make your initial payment into the ISA before you turn 40.
The government will add a 25% bonus to your savings every year up to a maximum of £1,000. It’s important to note that the Lifetime ISA limit of £4,000 counts towards your annual ISA limit.
When you withdraw money from your Lifetime ISA to buy your first home with a mortgage, the property must cost £450,000 or less, and you will need to ensure that at least 12 months have lapsed since you made your first payment into the ISA. You will also need to use a solicitor or conveyancer to act on your behalf during the property purchase. From here, the ISA provider will pay the funds to them.
Joint Mortgage Affordability
A joint mortgage is when two or more people apply for a mortgage together. The main benefit of a joint mortgage is that it can increase your affordability. Lenders will take the combined income of all applicants into consideration, meaning you can borrow more than you could on your own.
For example, if one person is looking to get a mortgage on a £25k salary, and the other person is looking to get a mortgage on £30k salary, a lender would be able to offer a joint mortgage based on a total income of £55k. This means that your borrowing potential is significantly increased.
Taking out a joint mortgage also means that there is shared responsibility for monthly repayments. This means that all parties are jointly liable for the entire mortgage debt. So, if one person can’t pay, the other is responsible for covering the full amount.
Next Steps
After obtaining an estimate using our quick house buying affordability calculator and considering your mortgage options, the next recommended step is to consult with a mortgage broker. A broker can provide a more detailed assessment of your borrowing capacity, taking into account your specific financial situation, and guide you towards the most suitable mortgage options. They can also help you access lenders and mortgage products not directly available on the open market, potentially allowing you to borrow more than standard calculators suggest.
For helping using our home loan affordability calculator and more mortgage advice, get in touch with our team today.
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Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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