Guide · 7 min read
What a lender actually looks at.
Income multiples make for a tidy headline. The actual decision is messier — stress testing, outgoings, the credit file, the deposit, and a series of policy thresholds you don't get to see.
The 4× / 4.5× rule of thumb
Most UK lenders cap residential mortgages at around 4 to 4.5 times annual income. Joint applications get the higher multiple because two incomes feel less risky than one. A handful of specialist lenders will go to 5× or even 6× for higher earners or specific professions, but those products usually carry a rate premium.
Our affordability calculator uses 4× single, 4.5× joint as a sensible default. It's a ceiling, not a target.
Stress testing
Since 2014, regulated lenders are required to check that you could still afford the mortgage if rates rose. The exact test changed in 2022, but in practice most lenders model affordability at their reversion rate (the rate the mortgage drops to when your fix ends) plus a margin — typically the equivalent of 3 to 4 percentage points above your headline fixed rate.
The implication: a mortgage that looks affordable at 4.5% today must also look affordable at, say, 7.5% to 8.5%. If you're stretching the multiple, you may fail the stress test even though you'd "obviously" cope at the actual rate.
Outgoings the calculator can't see
Your actual offer will be reduced by:
- Other credit commitments — personal loans, car finance (especially PCP), credit card balances carried month to month.
- Childcare costs — lenders often deduct nursery fees as a fixed monthly outgoing.
- Maintenance / child support payments.
- Student loans — treated by some lenders as an outgoing equal to the monthly repayment.
The deposit and the LTV ladder
How much you borrow as a percentage of the property price (the "loan-to-value", or LTV) doesn't just affect whether you can buy — it heavily affects the rate you're offered. Rates step down at each LTV threshold:
- 95% LTV (5% deposit): higher rates, fewer lenders, more conservative valuations.
- 90% LTV: better.
- 85% LTV: better still.
- 75% LTV: typically the best rates for most lenders.
- 60% LTV: the lowest available rates, but the marginal benefit is small.
If your deposit lands you at 91% LTV, scraping together another £5,000 to hit 90% may save you noticeably on the rate — worth thinking about before exchange.
The credit file
Lenders pull a credit report. Recent missed payments, defaults, or county court judgements (CCJs) can knock down which lenders will consider you. A "thin" credit file (no history at all) is also a problem — lenders need data points to assess you. If you have neither file nor adverse history, a couple of months on a credit card paid off in full each month can help.
What the calculator gives you
An indicative ceiling. It tells you the rough shape of what you might borrow, ignoring all the lender-specific policy and the things only your full application would surface. Treat it as a sanity check before you fall in love with a property, not as a binding figure.
For a real number, talk to a broker or get an Agreement in Principle (AIP) from a lender. Both are usually free.
Try the calculator: Affordability calculator →
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