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What Mortgage Can I Afford?

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Asking yourself: what mortgage can I afford? A mortgage affordability calculator can be very useful here. It will give you an estimate of how much you can afford to borrow, considering your savings and other factors. But, you also need to weigh up your individual circumstances. Let’s take a look.

How much mortgage can I afford?

To use an affordability calculator you will need to enter the following:

  1. Annual income 
  2. Monthly take-home amount
  3. Any other income you earn
  4. Monthly household costs
    1. Credit card loans & payments
    2. Child maintenance
    3. Any fixed costs e.g. school fees
  5. Estimated living costs
How Much Could You Borrow?

Remember, this is just an estimate, to be used as a guide only. 

Can you keep up with the repayments? 

Remember, when you’re a homeowner, it’s not just monthly mortgage repayments you need to worry about. You’ll also be paying for:

  • The upkeep and maintenance of the property
  • Utility bills
  • Living expenses 
  • Other costs

You need to ensure you’ll be able to keep up with the payments every month, on top of everything else. Factor this in when deciding if you can afford a mortgage. A mortgage calculator can help provide a guide. 

Mortgage Calculator

What mortgage can I afford with my salary?

What do you need for a mortgage? A lender will usually lend you 4x your salary. 

So, let’s say you earn £30,000, that would be £120,000. As of July 2021, the average UK house price was £256,000. This would mean you’d need £136,000 in savings. 

This is why it’s so difficult for many to buy alone. Most choose to do it with a partner, or occasionally with friends. Government schemes like the Help to Buy Equity Loan can also help. 

Where can you afford to buy?

Property prices vary greatly depending on location. No surprises here, but the capital is the most expensive area to buy. While there are some cheaper areas in London, the average house price currently sits at £649,941. Even commuter towns further out tend to have a heftier price tag than rural areas.

This calculator takes a look at average property prices in a particular postcode to see what you can afford, given your salary and other factors.

Affordability Calculator

What mortgage is right for you?

There are many mortgage products out there, so you need to do your research to see what’s right for you. 

95% LTV mortgages are out there to help those with smaller deposits get on the housing ladder. They’re not for first-time buyers alone. 

Is it better to buy now, or save more?

It can be tough saving for a house deposit, especially if you’re paying rent at the same time. But, the more you can save, the better the mortgage deal you’re likely to get, with more manageable interest rates. 

So, depending on your individual situation, it might be best to wait to buy. Of course, this might not suit you. People may need to move for a number of reasons, such as a new job or divorce. But, it’s something to consider.

Need a mortgage adviser?

If you’re unsure what mortgage is best for you, or what you can afford, speaking to a mortgage adviser can help you explore your options. It can also make the application process easier and quicker. We can put you in touch with our approved panel. Get a mortgage quote for free below. 

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Last Updated: December 16th, 2021