How much mortgage can I afford? Here’s how to find out

MORTGAGE providers will assess a number of factors in order to work out how much they can lend you. Here’s how to find out how much mortgage YOU can afford.

How much you can afford to borrow, where you can afford to buy, and how big a home you can afford are all important questions to consider when thinking about getting on the property ladder. Mortgage providers won’t lend you something you can’t afford to repay, so before you start looking for your dream property it is important to know how much you’re able to borrow. How much mortgage can I afford?

Unless you can buy a house outright, you’ll need to borrow money from a mortgage provider to buy a property.

Of course, it’s the mortgage lender’s job to figure out whether you can afford a property or not but it’s important to look into it yourself first.

It doesn’t make sense to look for houses worth £600,000 when you’re only able to borrow £300,000 from the lender.

Even if you are offered a large sum, you must make sure you can manage the repayments.

How much mortgage can I afford?

The easiest way to figure out how much you can afford to borrow is by using a mortgage calculator.

There are plenty of calculators available online that will tell you how much you can borrow.

The first question will normally ask you how much people are applying for a mortgage – are you planning on a joint mortgage with your partner or buying alone?

Depending on your answer, you will then be asked to provide your income and the income of whoever you are buying with.

How much mortgage can I afford: magnifying glass on numbers

How much mortgage can I afford: Lenders will often lend you about three to four and a half times your income (Image: Getty)

Normally, banks and building societies will offer to lend you between three and four and a half times the income of the buyers.

For example, if you earn £30,000 a year and your partner earns £20,000 you could be offered between £150,000 and £225,000.

If you work in a certain profession, especially if you are a doctor or dentist, you could be leant up to six times your annual income!

This will give you a rough estimate of how much you can afford, but there’s more to it than that.

There are other factors taken into consideration by lenders that online calculators don’t.

Lenders will ask you about your spending habits as part of an affordability assessment.

They will ask about your past and present debt repayments such as student loans and credit card bills, as well as your regular bills such as rent, gas, and electricity.

Before you start looking to buy, you need to take into consideration how much you spend on food, leisure, transport, and more.

How much mortgage can I afford: women shopping

How much mortgage can I afford: Cut back on unnecessary spending (Image: Getty)

The lender won’t just trust your word for it, they will need to look at recent bank statements and payslips for proof.

You will need to keep your outgoing costs down in the leadup to purchasing a home. recommends reducing your bills by switching to cheaper tariffs and packages and cancelling subscriptions that you don’t really use.

Another easy way to save money is to cut down on day-to-day costs such as coffee on the commute, unnecessary clothes shopping, getting cabs when you can take public transport, and things like that.

Apps such as Monzo and Oval can help you to keep your spending down.

Interest rates will also determine how much mortgage providers will lend you.

You can’t control this, but lenders will ‘stress test’ repayment plans to make sure you could cope if interest rates rose by three percentage points.

Mortgage interest rate rise calculators online can show you how you’d fare if interest rates increased.

Those granted a fixed-rate mortgage wouldn’t be affected by interest rates until the end of the fixed-rate period, whereas those with variable-rate mortgages could be affected at any time.