How much can you borrow on a mortgage?

Most lenders will set a limit on the amount of credit you can borrow, usually four to five times your annual income. They'll also check that you can afford the monthly repayments as well as any other debts you have. The lender will give you a loan up to the lower of these two amounts. This tool estimates both limits for you and tells you which one applies when you enter your income, deposit and monthly expenses.

What is the difference between income factor and solvency?

For example, income multiples are a simple upper limit like "x" times the salary. When assessing repayment ability, actual monthly expenses will be examined and housing costs as well as total debt must be reasonable in relation to income (the "28/36 rule"). Lenders apply both criteria simultaneously and grant an amount up to the lower limit. Therefore a higher multiple is only beneficial if the monthly budget represents the stricter upper limit.

Does the amount you can borrow change depending on how much equity you bring to the table?

Not directly. The loan amount for a mortgage is determined by income and ability to repay. Equity is added to the loan and also determines the maximum purchase price of the property as well as the level of financing. The more equity that is put in, the lower the level of financing will be which can potentially lead to better interest rates and reduced overall costs.

Can you borrow a higher amount with a joint application?

Generally yes. Lenders will usually take into account the income of both applicants so the second applicant's income will increase both the upper limit for the income multiplier and the maximum monthly repayment amount possible. If either applicant already has debts, these will still be taken into account when calculating their ability to repay, so it may make sense to pay off any existing debts before applying.

Is this a mortgage offer?

No. This is an estimate to help you budget and compare properties. The lender will review your income, creditworthiness, expenses, run a stress test on the monthly repayments with higher interest rates, and assess the property before making a formal offer. The next step would usually be pre-approval.

Mortgage Affordability Calculator

Your finances

Your annual income

Second applicant's income

Deposit

Monthly debt payments

Lending assumptions

How much you can borrow

Maximum you could borrow

Maximum property price

Estimated monthly payment

Your borrowing is capped by what you can afford each month, not by the income multiple. Reducing monthly debts, a lower rate, or a longer term would raise this figure more than a bigger multiple.

This is an estimate to guide your search, not a mortgage offer. A lender will assess your full circumstances, credit history, spending, and the property before deciding.

Maximum you could borrow

Cap by income multiple: $
Cap by monthly affordability: $
Maximum property price: $

Estimated monthly payment: $
Total annual income used: $
Effective income multiple

Loan-to-value (LTV): %
Debt-to-income (DTI): %

Breakdown

How your property price is funded ($)

Your maximum property price splits into your deposit and the mortgage you borrow.

Maximum borrowing and property price at different income multiples
Income multiple	Max borrowing ($)	Max property price ($)
3.00x	135,000	165,000
3.50x	157,500	187,500
4.00x	180,000	210,000
4.50x	202,500	232,500
4.75x	213,750	243,750
5.00x	225,000	255,000
5.50x	247,500	277,500

A mortgage affordability calculator will use your income, equity and outgoings to work out how much you can realistically borrow. It'll estimate the maximum loan amount, property price and monthly repayments that this would allow for. Use it as a budgeting tool before you start looking at properties or approaching lenders.

How lenders determine loan amount

Behind almost every mortgage assessment are two ceilings and the lender chooses the lower one.

The first is the multiple of income. Many lenders cap the loan amount at about four to five times annual salary. For buyers who meet those requirements, some first-time buyer programs can extend that to 5.5 times. The second is repayment capacity. This looks at whether a person can comfortably afford monthly payments on top of other debts. This tool calculates both caps and shows which one limits the loan amount.

Upper limit based on multiple of income

Calculating the upper limit based on income multiples is the easiest part. It's simply your total annual income multiplied by the multiple that the lender will accept.

\text{Maximum loan} = \text{income multiple} \times \text{annual income}

The annual income is 45,000 and if you calculate it with the factor of 4.5, then the result will be around 202,500. If a joint applicant comes in, then the lender usually considers the combined income of both individuals. So often times, when you buy a property jointly with your partner, then the maximum loan amount goes up. However, a higher factor is only beneficial if the repayment capacity is more than the strict upper limit.

Maximum amount you can afford to repay (the 28/36 rule)

Affordability looks at how much you can comfortably pay each month. A common guideline is the 28/36 rule, which states that housing costs should be less than 28% of your monthly income and all debt including a mortgage should be less than 36% of your monthly income.

\text{Max payment} = \min\!\left(0.28 \times \text{monthly income},\; 0.36 \times \text{monthly income} - \text{monthly debts}\right)

That maximum monthly rate is then converted into a loan amount using a standard mortgage formula that takes into account interest rates and term.

\text{Loan} = \text{payment} \times \frac{1 - (1 + i)^{-n}}{i}

where i is the monthly interest rate (annual interest rate divided by 12) and n is the number of monthly payments (annual loan term multiplied by 12). The values of 28% and 36% in this tool are customizable to match the terms of a more generous or stingy lender.

Example calculation

Assuming an annual income of $100,000, monthly debt payments of $500, equity contribution of $40,000, interest rate of 6.5 percent and a term of 30 years, the monthly income is approximately $8,333. The upper limit for housing costs is 28 percent of monthly income or about $2,333 per month, which is more restrictive than the debt limit of 36 percent. At an interest rate of 6.5 percent and a term of 30 years, you can afford to pay back approximately $2,333 per month on your loan amount, so you can borrow about $369,159. If you add the equity contribution of $40,000, then your housing budget is approximately $409,159, which gives a debt-to-income ratio of nearly 34 percent.

Factors that affect maximum loan amount:

Some factors have more of an impact on this value than others.

Lever	Effect on what you can borrow
Higher income	Raises both the income-multiple cap and the affordable payment.
A second applicant	Most lenders add both incomes, often the fastest way to borrow more.
Lower monthly debts	Frees up room under the total-debt limit, so more of your income can go to the mortgage.
A bigger deposit	Does not raise the loan, but lifts the property price you can reach and lowers your loan-to-value.
A lower interest rate	Makes each pound of payment support a larger loan.
A longer term	Lowers the monthly payment, so the budget supports a larger loan, though total interest rises.

Equity ratio and credit ratio:

The down payment does not directly increase the mortgage amount but it determines how much property you can buy and your loan to value ratio (LTV), which is the percentage of the loan compared to the price of the home. If the down payment is 10 percent, then the LTV will be 90 percent; if the down payment is 20 percent, then the LTV will be 80 percent. A lower LTV can usually get you a better interest rate and in some markets it can avoid the need for private mortgage insurance (PMI). So saving up a little more before buying could pay off as it has two benefits.

Why this value is only a guideline:

It is not necessary to borrow the full amount just because a lender or calculator provides you with a certain figure. To ensure that your mortgage payments are affordable and leave enough financial room for interest rate increases, emergencies, repairs and everyday expenses, keep your mortgage at a manageable level. Lenders typically perform stress tests to see how rising rates will affect your budget and review your income situation. Self-employed applicants usually need to provide two years of accounting records. Use this information as a starting point to obtain pre-approval from a lender and determine the maximum amount you can borrow.

This calculator is for general information purposes only and does not constitute financial advice or a mortgage offer. It is in no way connected to any particular lenders. The actual amount you may be able to borrow depends on the lender's assessment of your income, creditworthiness, outgoings and property concerned. Please consult a qualified mortgage advisor before making a decision.

Frequently asked questions

How much can you borrow on a mortgage?: Most lenders will set a limit on the amount of credit you can borrow, usually four to five times your annual income. They'll also check that you can afford the monthly repayments as well as any other debts you have. The lender will give you a loan up to the lower of these two amounts. This tool estimates both limits for you and tells you which one applies when you enter your income, deposit and monthly expenses.
What is the difference between income factor and solvency?: For example, income multiples are a simple upper limit like "x" times the salary. When assessing repayment ability, actual monthly expenses will be examined and housing costs as well as total debt must be reasonable in relation to income (the "28/36 rule"). Lenders apply both criteria simultaneously and grant an amount up to the lower limit. Therefore a higher multiple is only beneficial if the monthly budget represents the stricter upper limit.
Does the amount you can borrow change depending on how much equity you bring to the table?: Not directly. The loan amount for a mortgage is determined by income and ability to repay. Equity is added to the loan and also determines the maximum purchase price of the property as well as the level of financing. The more equity that is put in, the lower the level of financing will be which can potentially lead to better interest rates and reduced overall costs.
Can you borrow a higher amount with a joint application?: Generally yes. Lenders will usually take into account the income of both applicants so the second applicant's income will increase both the upper limit for the income multiplier and the maximum monthly repayment amount possible. If either applicant already has debts, these will still be taken into account when calculating their ability to repay, so it may make sense to pay off any existing debts before applying.
Is this a mortgage offer?: No. This is an estimate to help you budget and compare properties. The lender will review your income, creditworthiness, expenses, run a stress test on the monthly repayments with higher interest rates, and assess the property before making a formal offer. The next step would usually be pre-approval.

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Disclaimer: This calculator is provided for general informational and educational purposes only. Our calculators are under active development, and results may be inaccurate, incomplete, or unsuitable for your situation. Always verify the figures independently and seek advice from a qualified professional before relying on them. We make no warranties and accept no liability for any loss or decision arising from use of this tool.

References

Consumer Financial Protection Bureau: Understand loan options and affordability
US regulator guidance on how much house you can afford and debt-to-income limits.
MoneyHelper: How much can I borrow for a mortgage?
UK government-backed guidance on income multiples and affordability assessments.
Investopedia: The 28/36 Rule
Explanation of the front-end and back-end debt-to-income ratios lenders use.