Mortgage Affordability: How Much Can You Borrow?
Before you start falling in love with a property, it’s a good idea to know exactly what’s in your "shopping basket." There’s nothing worse than finding your dream home only to realise the figures don’t quite add up.
At Mighty Mortgages, we’re all about making the process feel easy.
Here’s the low-down on how lenders decide how much they’re willing to lend you.
The "Magic Multiplier"
Most lenders start with a simple sum: your annual income multiplied by a certain number. As a general guide, banks usually land somewhere between 4 and 5 times your annual salary before tax.
If you’re a "mighty" applicant with a perfect record, some specialist lenders might even go up to 6 times your income, but that’s usually reserved for high-earning individuals.
What does that look like in real life?
Single applicant earning £25,000/year: Could borrow between £100,000 – £125,000.
A couple with a combined income of £60,000/year: Could borrow between £240,000 – £300,000.
It’s not just about what you earn - it’s about what you spend
Lenders don't just look at your payslip; they look at your "story time" (aka your bank statements). They’ll do a deep dive into your committed expenditure. This includes things like:
Loan and car finance repayments
Child support or nursery fees
Estimated running costs for your new home (Council Tax, utilities, etc.)
Commuting costs
They use a debt-to-income ratio to make sure you have enough "disposable" cash left over to actually live your life after the mortgage is paid.
4 things that move the needle
Several factors can either boost your borrowing power or dial it back:
Credit score: A higher score is like a golden ticket - it often leads to better rates and larger loans.
Existing debt: Higher debts mean less "room" for a mortgage. Clearing a credit card can often boost your borrowing capacity.
Your deposit: The bigger your deposit, the lower your loan-to-balue (LTV). This usually opens the door to much better deals.
Living expenses: If you’ve got high monthly costs (looking at you, childcare!), it might limit the total amount you can borrow.
Don't just guess your budget. We cut through the jargon to show you exactly what’s in your shopping basket before you fall in love with a home.
We handle the legwork
Feeling a bit overwhelmed by the numbers? Don't sweat it. Our experts speak your lingo and can give you a clear, honest picture of what’s affordable for you. To make sure you’re in the best possible position before we chat, check out our guide: ‘Getting Mortgage Ready: How to Swerve the Stress’.
