Mortgage affordability calculator
There is no single correct answer to how much you can borrow. Here is the realistic range, and what each level costs per month.
Rates for 2026/27, verified 7 August 2026 against Rates and thresholds for employers 2026 to 2027
There is no single correct answer here.The FCA's mandatory stress test was withdrawn in August 2022, and lenders now set their own rules. 4.5 times income is the long-standing high street default, but several mainstream lenders go to 5.5 times as standard and higher for particular borrowers. Any calculator that gives you one confident number is guessing — this shows the range and what each level costs.
- Combined income
- £40,000
- Deposit
- £30,000
- LTV at 4.5×
- 86%
- Monthly take-home
- £2,693
| Lender stance | Multiple | Max loan | Max price | Monthly | Share of take-home |
|---|---|---|---|---|---|
| Cautious | 4× | £160,000 | £190,000 | £889 | 33% |
| High street default | 4.5× | £180,000 | £210,000 | £1,001 | 37% |
| Generous | 5× | £200,000 | £230,000 | £1,112 | 41% |
| Maximum from some lenders | 5.5× | £220,000 | £250,000 | £1,223 | 45% |
| Multiple | Payment now | Payment if rates rise | Extra per month |
|---|---|---|---|
| 4× | £889 | £983 | £93 |
| 4.5× | £1,001 | £1,105 | £105 |
| 5× | £1,112 | £1,228 | £117 |
| 5.5× | £1,223 | £1,351 | £128 |
Why this shows a range and not one number
Every other affordability calculator gives you a single confident figure. That figure is made up, and here is why.
The FCA's mandatory interest rate stress test was withdrawn on 1 August 2022. Since then lenders have set their own affordability rules within the FCA's broader MCOB framework. In July 2025 the Financial Policy Committee recommended allowing individual lenders to increase their share of lending at loan-to-income ratios of 4.5 and above, and several mainstream lenders now offer 5.5 times income as standard, with higher multiples for particular borrower profiles.
So there is no single correct answer. What you can actually borrow depends on which lender you approach, your credit file, how they treat your particular income, and their own stress rate. A range with the reasoning shown is more honest and more useful than a precise-looking number that no lender is bound by.
What lenders actually assess
- Loan to income. The headline cap. 4.5 times is the long-standing default; 4 times is cautious; 5.5 times is available from several high street lenders.
- Affordability modelling. Your income against committed outgoings, credit commitments, childcare and dependants. This often bites before the LTI cap does.
- The stress test. Can you still pay if rates rise by a few points? Lenders set their own margin now, typically 1 to 3 points above the product rate or a floor rate.
- Loan to value. Your deposit determines which rates you can access at all. The jumps at 90%, 85%, 80% and 75% are significant.
What counts as income
Basic salary always counts in full. Beyond that lenders differ sharply: overtime, bonus and commission are often counted at 50% to 100% and usually need a two-year history. Self-employed applicants normally need two to three years of accounts or SA302s, with lenders using either an average or the most recent year. Some lenders count child benefit and tax credits; others do not.
Costs beyond the deposit
Affordability is not only the monthly payment. Budget for the upfront costs too:
| Cost | Typical amount |
|---|---|
| Stamp duty / LBTT / LTT | Work yours out |
| Conveyancing | £1,200 – £2,500 |
| Survey | £400 – £1,500 |
| Mortgage product fee | £0 – £1,500 |
| Removals | £400 – £1,500 |
| Deposit | LTV | Effect on rates |
|---|---|---|
| 5% | 95% | Fewest deals, highest rates |
| 10% | 90% | Noticeably better choice |
| 15% | 85% | Materially cheaper |
| 25% | 75% | Near the best available |
| 40% | 60% | Best rates on the market |
Honest limits
- This is not a decision in principle. Only a lender can tell you what they will actually lend, and only after assessing your credit file and documents.
- Credit commitments are handled roughly. Lenders model these in detail; the calculator applies a simple reduction. A car finance agreement with two years left is treated very differently from one ending next month.
- Non-salary income is not modelled. Bonus, commission, overtime, self-employed profit and rental income are all treated differently by every lender.
- No allowance for dependants. Children and other dependants reduce affordability, sometimes substantially.
- Take-home pay assumes England/Northern Ireland rates, no pension contribution and no student loan. If you have those, your actual disposable income is lower — check the take-home pay calculator.
Frequently asked questions
How much can I borrow on a £40,000 salary?
Typically £160,000 to £220,000, depending on the lender. The high street default of 4.5 times income gives £180,000, cautious lenders work to 4 times, and several mainstream lenders now go to 5.5 times for borrowers who fit their criteria. Your commitments and credit file move it within that range.
Is the 4.5 times income rule still a thing?
It is a convention, not a rule for individual borrowers. The Bank of England limits the proportion of a lender's new lending that can be above 4.5 times income, but that is a cap on the lender's book, not on you. Individual borrowers can and do get more.
Do lenders still stress test my mortgage?
Yes, but the mandatory FCA test was withdrawn in August 2022 and lenders now set their own approach. Most check you could still afford payments at a few percentage points above your product rate, or at a floor rate. The stress table above shows what a one point rise would cost you.
Does a student loan reduce how much I can borrow?
Yes. Repayments come out of your income before a lender assesses affordability, so a Plan 2 borrower on £40,000 has around £950 a year less disposable income than someone without a loan. It rarely stops an application but it does reduce the maximum.
Can I borrow more with a longer term?
Usually yes, because the monthly payment falls and affordability improves. It costs considerably more in total interest, and lenders will not normally take the term past your expected retirement age. A 35-year term instead of 25 might raise your maximum by 10-15%.
How much deposit do I actually need?
The minimum is usually 5%, but 10% opens up a noticeably better range of deals and 15% is materially cheaper again. Remember the deposit is not the only upfront cost — stamp duty, legal fees and a survey typically add several thousand pounds.
Related calculators
- Mortgage overpayment calculator Put in what you can afford each month and see the interest saved and the years knocked off the term.
- Stamp duty calculator Stamp Duty Land Tax for England and Northern Ireland, with every band shown and the first-time buyer cliff edge flagged before it catches you.
- Take-home pay calculator Enter your salary to see exactly what reaches your bank account, and how each deduction was worked out.
Tax year 2026/27 · How we calculate · All rates and sources · What changed