How much can I borrow for a mortgage?
UK mortgage lenders size a loan primarily by income multiple — typically 4 to 4.5× your combined annual gross income, sometimes reaching 5 or 5.5× for higher earners. That's a rough ceiling, and the actual offer comes from an affordability assessment that stress-tests your monthly take-home against your committed outgoings and a higher interest rate (usually around 6–7% even if your offered rate is lower), to make sure you could still afford the payments if rates climbed.
On a combined income of £60,000, a 4.5× multiple suggests borrowing of around £270,000. Add a £30,000 deposit and you're looking at properties up to £300,000 at 90% LTV. If you have £500 a month of existing loan or credit card repayments, lenders will treat that as reducing your affordability — the calculator above subtracts 12 months of your committed outgoings from the headline figure as a simple proxy.
Remember this is a starting estimate, not a promise. Credit score, employment stability, whether your income is salaried vs self-employed, dependants, and the specific lender's model can all shift the actual offer by 10–20% in either direction. A mortgage adviser can run the same numbers through multiple lenders' criteria and surface the highest, cheapest, or most flexible option.
What affects affordability?
- Credit score: missed payments, high credit utilisation, CCJs, and recent defaults all reduce the amount lenders will offer — or whether they'll lend at all.
- Employment type: permanent employees typically get the best terms. Self-employed applicants need 2–3 years of accounts. Contractors may be assessed on day rate × working weeks or on the underlying company profit.
- Existing debt: credit card balances, personal loans, car finance, and Buy Now Pay Later are all subtracted from affordability. Student loan repayments count too, though more lightly.
- Dependants and childcare: lenders apply a standard deduction per child and factor in explicit childcare costs.
- Pension and salary sacrifice: contributions reduce gross pay on paper — which can reduce the loan a lender is willing to offer. Some lenders add it back in; many don't.
- Bonus, commission, overtime: variable income is usually counted at 50%, and needs to be evidenced on payslips and P60s.
Understanding loan-to-value (LTV)
LTV is the mortgage as a percentage of the property price. £270,000 borrowed on a £300,000 property is 90% LTV; £240,000 on the same property is 80% LTV. Lenders price risk in tiers, so the rate improves at discrete boundaries — typically 95%, 90%, 85%, 75%, and 60%.
The headline saving from a bigger deposit isn't linear: moving from 91% LTV to 89% can unlock a whole tier of cheaper rates, while moving from 89% to 87% often changes nothing. If you're sitting just above a tier, it's often worth finding the extra deposit — or delaying a month to save it — to drop below. A better LTV also makes remortgaging easier if property values wobble during your fix.