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When buying your home, you may be unsure as to how much you can actually borrow or what property you will be able to afford. 

 

After the introduction of new rules in 2014, lenders now check your capability of repaying a mortgage if certain things were to happen, like if interest rates were to increase by 6-7%. 
 

They will also still use income multipliers to cap the amount you can borrow by multiplying your income by up to five times to limit your maximum borrowing amount. 

 

To find out what sort of property you can afford before you apply, you can use our online mortgage calculator to give yourself an approximation of how much you will be paying back every month. 
 
As a brief summary, if you are looking at borrowing up to £175k, or anything over 85% loan-to-value (LTV), then the amount you can borrow should be capped at 4.5x your income. 
 
If it’s over £175k, then it should be capped at 5x your income.  
 
There are also other rules to consider, such as if you are applying for a Help to Buy mortgage, there is a cap of 4.4x and a cap of 4x for loans above 85% LTV if your income is less than £50k.  
 
You won’t get a completely accurate figure until you apply for a mortgage, but using the rules above, you or a lender/broker can get a rough estimate. 

 

For further information on what your affordability is, or to get the ball rolling on your mortgage application, contact one of our expert advisers and they will be able to talk you through the next steps.