Before you fall in love with a house on Rightmove, there’s one question you need to answer first: how much will a bank actually lend you? UK lenders use a combination of income multiples, stress tests, and affordability models to work out your limit. Understanding how they think puts you in a much stronger position when it comes to making offers.
Income Multiples: The Starting Point
Most UK lenders offer between 4 and 4.5 times your gross annual income. A few go up to 5 or even 5.5 times for high earners (typically above £75,000) or professionals on clear career tracks — doctors, solicitors, accountants, that sort of thing. Joint applicants? Combined gross income.
So on a £50,000 salary, expect £200,000–£225,000. Joint income of £80,000? Maybe £320,000–£360,000. But the income multiple is just the starting point — the affordability check often brings this number down.
Affordability Stress Tests
Since the Mortgage Market Review in 2014, every lender runs a detailed affordability check. They go through your actual monthly outgoings — childcare, car finance, credit card minimums, subscriptions, even your Netflix and gym membership. Then they stress-test the mortgage at a higher rate (typically their standard variable rate plus 1–3%) to make sure you could still cope if rates went up.
The Bank of England withdrew its formal affordability test recommendation in late 2022, but most lenders carry on doing their own version anyway. The upshot: your actual offer is often lower than the headline multiple suggests.
What Counts as Income?
More than just your basic salary, thankfully. Most lenders will consider:
- Guaranteed overtime and shift allowances — averaged over 6–12 months
- Commission and bonuses — averaged over 2–3 years, with lenders typically using 50–100% of the average
- Self-employed income — based on SA302s or accountant-certified figures, usually a 2–3 year average
- Rental income from buy-to-let — some lenders allow a proportion to supplement affordability
- Benefits income — child benefit, tax credits, and certain disability benefits are accepted by many (not all) lenders
The Deposit Factor
Your deposit size affects both how much you can borrow and the interest rate you’re offered. Lenders price mortgages in loan-to-value (LTV) bands:
- 95% LTV (5% deposit) — available but with higher rates and stricter checks
- 90% LTV (10% deposit) — the sweet spot where rates drop meaningfully
- 85% and 80% LTV — further improvements
- 75% LTV and below — the best rates on the market
Every extra 5% of deposit can save you £10–£30 a month on a £200,000 mortgage. Over 25–30 years, that adds up to thousands.
Hidden Costs Beyond the Mortgage
The mortgage is only part of the picture. Budget separately for:
- Stamp Duty — first-time buyers pay nothing on the first £425,000 (on properties up to £625,000), but everyone else pays from £250,001
- Legal fees — conveyancing typically runs £1,000–£2,000 including searches
- Survey costs — a HomeBuyer Report is £400–£700; a full building survey £600–£1,500
- Mortgage arrangement fees — often £999–£1,999 for the best fixed-rate deals
- Moving costs — removals, mail redirection, and whatever urgent work the new place needs on day one
How to Increase What You Can Borrow
If the numbers aren’t working, try these:
- Pay off existing debts before applying — clearing a £200/month car payment can add £40,000+ to your borrowing capacity. That’s not a typo.
- Reduce credit card limits — lenders factor in the potential for you to max them out, even if your balance is zero
- Extend the mortgage term — going from 25 to 35 years cuts monthly repayments and increases what you qualify for
- Use a mortgage broker — they know which lenders are more generous with specific income types. Worth their weight in gold.
- Consider shared ownership if it’s available in your area
See What You Can Afford
Our free mortgage affordability calculator takes your income, outgoings, and deposit to estimate your maximum borrowing — giving you a realistic budget before you start falling in love with houses you can’t afford.