A mortgage affordability calculator that estimates the home price and maximum mortgage you could realistically afford from your income, deposit, other debts and a target housing ratio. For first-time buyers and movers sizing up a budget before talking to a lender or broker.
How it works
The calculator applies two limits and takes the lower. First, an affordability limit: it caps monthly housing spend at your chosen ratio of gross monthly income (income ÷ 12 × ratio), subtracts your other monthly debts, and finds the largest mortgage whose payment fits that budget at your rate and term — using the inverse amortising formula P = M · ((1+r)ⁿ − 1) ⁄ (r(1+r)ⁿ). Second, an income-multiple cap of 4.5× gross annual income, which many lenders impose. The smaller of the two is your maximum mortgage; adding your deposit gives the affordable home price, and the mortgage divided by the price gives the loan-to-value. The tool flags when the 4.5× cap, rather than monthly affordability, is the binding limit.
Example
Gross income £60,000, other debts £300/month, deposit £40,000, rate 5% over 25 years, housing ratio 36%:
- Monthly housing budget: £60,000 ÷ 12 × 36% = £1,800, minus £300 debts = £1,500 for the mortgage
- That payment supports a mortgage of about £257,000, but the 4.5× cap limits borrowing to £270,000, so affordability binds here at £257,000
- Affordable home price: about £297,000, at roughly 86% LTV
| Income | Deposit | 4.5× cap | Likely max borrowing |
|---|---|---|---|
| £40,000 | £25,000 | £180,000 | ~£180,000 |
| £60,000 | £40,000 | £270,000 | ~£257,000 |
| £90,000 | £60,000 | £405,000 | ~£385,000 |
It is a guidance estimate and runs entirely in your browser.