Mortgage affordability calculator, 2026/27

How lenders actually decide affordability

An income multiple, commonly 4 to 4.5 times gross annual income for mainstream residential mortgages, gives a useful starting estimate, but it is only the first filter lenders apply. Behind that headline multiple sits a full affordability assessment that looks at your actual monthly outgoings, existing credit commitments, number of dependants, and a stress test of whether you could still afford payments if interest rates rose from the deal rate to a higher notional rate, often several percentage points above what you are actually being offered.

For company directors and contractors, income assessment can be more complex still. Some lenders will only count salary and dividends actually drawn, while others will consider retained profit in the company as part of your affordability, which can significantly change the maximum loan on offer between different lenders for the same underlying income.

How this is calculated

This calculator simply multiplies the combined gross income you enter by the income multiple you specify (defaulting to 4.5x, a common figure for many mainstream lenders) to estimate a maximum loan, then adds your available deposit to estimate a maximum property price. Deposit as a percentage of the total price is shown because it affects which mortgage products, and therefore which rates, you are likely to qualify for; a 25% deposit typically unlocks meaningfully better rates than a 5% or 10% deposit.

This is a simplified model deliberately kept separate from stress-testing, credit scoring or debt-to-income calculations that a real lender's underwriting system performs, so treat the output as a ballpark figure to plan around, not a mortgage offer.

Improving what you might be offered

Reducing existing credit card, car finance or personal loan balances before applying can materially increase what a lender is willing to offer, because affordability calculations subtract committed monthly outgoings from disposable income before applying any multiple. A larger deposit both reduces the loan needed and can unlock a better rate band, improving affordability twice over.

For directors, keeping at least two to three years of finalised accounts or an accountant's certificate showing consistent income can widen the pool of lenders willing to look at dividend and retained profit income, rather than salary alone.

What income multiple do most UK lenders use?

Most mainstream lenders offer around 4 to 4.5 times gross annual income, though this can rise for higher earners, certain professions, or with some specialist lenders, and can fall where affordability stress tests or existing debt reduce what you can service comfortably.

Does this include a stress test at a higher interest rate?

No. This calculator applies a straightforward income multiple only. Lenders separately test whether you could afford repayments at a higher notional rate than you're being offered, which can reduce the amount actually available compared with the simple multiple shown here.

How does being a company director affect what I can borrow?

Some lenders assess directors only on salary and dividends drawn, while others also consider retained profit within the company, so the maximum loan available for the same underlying income can vary noticeably between lenders; a specialist broker can help identify which approach suits your accounts.

Should I include stamp duty and fees in my deposit figure?

No, keep your deposit figure as the amount going towards the purchase price itself. Stamp duty land tax, legal fees and survey costs are separate cash requirements on top of your deposit and should be budgeted for additionally.