Do you know how much you can afford to spend on a home?
Our free home affordability calculator helps you estimate how much you could afford to spend on a home based on your income, deposit and financial commitments.
Enter your income, deposit, regular spending and other details. The calculator then estimates a potential property budget and the mortgage you may need.
This can help you answer an important question: what price home could I realistically afford without stretching my finances too far?
The result is an illustration rather than a mortgage offer. Lenders have their own affordability criteria and may assess your income, spending, debts and other circumstances differently.
How much can I afford to spend on a house?
The amount you can afford depends on more than your salary.
Most UK lenders cap mortgage borrowing at around 4.5× combined gross income, with a smaller number stretching to 5.0× or 5.5× for higher earners or specific professions.
The second cap is affordability: your monthly mortgage, after tax, pension and existing debt repayments, should typically not exceed about 35% of net pay. This calculator combines both checks and adds your deposit to give a realistic ceiling on the price you can offer.
Don’t forget the costs of buying. Stamp Duty Land Tax (SDLT) in England and Northern Ireland is charged in bands from 0% up to 12%, with first-time-buyer relief reducing tax on purchases up to £500,000. Solicitors, surveys, mortgage product fees and moving costs can easily add another £3,000–£8,000 on top.
It is also important to consider your own budget. The maximum amount a lender is willing to offer may be higher than the amount you would feel comfortable borrowing.
A realistic home budget should leave you with enough money for everyday spending, saving and unexpected costs, as well as your mortgage payments.
What affects how much I can borrow?
Mortgage affordability can be affected by a range of factors, including:
- your salary and other regular income
- your deposit
- existing loans and credit commitments
- household bills and regular spending
- childcare and other family costs
- your credit history
- your employment circumstances
- the mortgage term and interest rate
- whether you are applying alone or with someone else
Lenders may also consider other sources of income, such as bonuses, commission, freelance income or investment income, although their criteria can vary.
This means two people with the same salary could potentially be offered different mortgage amounts depending on their wider financial circumstances.
How does my deposit affect affordability?
Your deposit is the amount you contribute towards the purchase price of the property. A larger deposit means you need to borrow less, which can reduce your monthly mortgage payments and the amount of interest you pay.
It can also reduce your loan-to-value (LTV) ratio. This is the percentage of the property’s value that you borrow through your mortgage.
For example, a £60,000 deposit on a £300,000 property would mean a £240,000 mortgage and an LTV of 80%.
A larger deposit can also give you access to mortgage products with different rates, although the deal available to you will depend on the lender and your circumstances.
How much of my income should I spend on a mortgage?
There is no single percentage of your income that everyone should spend on their mortgage.
What is affordable will depend on your income, spending and circumstances. A mortgage that is manageable for one household could be difficult for another with different expenses or financial commitments.
It is worth looking beyond the mortgage payment itself and considering the cost of energy, Council Tax, insurance, food, transport and other household expenses.
You should also think about how your budget would cope if your circumstances changed, such as an increase in household costs or a reduction in income.
What other costs should I budget for when buying a home?
The cost of buying a home goes beyond the deposit and mortgage. Depending on your circumstances, you may also need to budget for:
- Stamp Duty or other property taxes
- solicitor and conveyancing fees
- mortgage and product fees
- surveys and valuation costs
- removal costs
- buildings and contents insurance
- repairs and maintenance
- Council Tax and household bills
These costs can make a significant difference to the amount of money you need to have available when buying a property.
It can therefore be useful to keep some savings aside rather than using all of your available money for the deposit.
What if I can’t afford the home I want?
If the calculator suggests that a property may be outside your budget, there are several things you could consider.
For example, you could explore:
- saving for a larger deposit
- looking at properties in a lower price range
- reducing other debts before applying
- considering a longer mortgage term
- applying jointly with a partner where appropriate
- reviewing your regular spending
- waiting until your financial circumstances change
A longer mortgage term can reduce your monthly payments, but you could pay more interest over the life of the mortgage.
The important thing is to find a balance between buying the home you want and keeping your mortgage payments manageable.
Should I speak to a mortgage adviser?
A home affordability calculator can help you understand your potential budget, but it cannot assess your full circumstances or tell you which mortgage is suitable for you.
A regulated mortgage adviser can look at your income, spending, deposit and borrowing requirements and help you understand the mortgage options that may be available. They can also explain how different mortgage terms and interest rates could affect your monthly payments and overall cost.
If you would like help with your home purchase, you can use the Trusted Advisor adviser matching service to find a regulated mortgage adviser suited to your needs. Alternatively, email our team at hello@trusted-advisor.co.uk and we can help you understand the next steps.