1. What is the House Affordability Calculator?

The House Affordability Calculator estimates how much you can borrow for a mortgage based on your income, typical lending multiples, and existing debts. It helps UK homebuyers understand their purchasing power in the current market.

2. How Does the Calculator Work?

The calculator uses the standard affordability formula:

Where:

• \( Annual\ Income \) — Your monthly income multiplied by 12
• \( Multiplier \) — Typically 4-4.5x income for UK mortgages
• \( Debts \) — Any outstanding loans or credit commitments

Explanation: Lenders typically offer mortgages based on income multiples, with 4.5 being a common maximum ratio in the UK.

3. Importance of Affordability Calculation

Details: Understanding your borrowing capacity helps set realistic property budgets and prepares you for mortgage applications. It also accounts for Financial Conduct Authority (FCA) affordability rules that UK lenders must follow.

4. Using the Calculator

Tips: Enter your net monthly income (after tax), use 4.5 as the default multiplier (or check with lenders), and include all outstanding debts. The result shows the maximum property price you might afford.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to the UK?
A: Yes, it uses typical UK lending multiples and follows FCA mortgage affordability guidelines.

Q2: What counts as "debts"?
A: Include personal loans, car finance, credit cards (use minimum 3% of balance), and other regular repayments.

Q3: Can I borrow more than 4.5 times my income?
A: Some lenders may offer higher multiples for high earners (>£75k) or with large deposits, but 4.5x is standard.

Q4: Does this include the deposit?
A: No, this calculates borrowing power only. You'll need a deposit (typically 5-20%) on top of this amount.

Q5: How accurate is this estimate?
A: It provides a guideline. Actual offers depend on credit history, expenses, interest rates, and lender criteria.