There’s no single answer to this question because every lender calculates it differently. Two people earning the same salary, doing the same job, can be offered noticeably different amounts, sometimes tens of thousands of pounds apart, simply because of how each lender’s affordability model treats their outgoings, income type, or even the property itself.
Why the difference between lenders is so large
Lenders used to rely on simple income multiples: take your salary, multiply by four or five, and that’s your maximum. Most have moved beyond this. Modern affordability assessments look at the full picture: your gross income, your regular outgoings, existing debts, dependants, and how much headroom you’d have if interest rates were to rise.
The thing most people don’t realise is just how differently lenders weigh these factors. We regularly see situations where one lender offers someone noticeably more than another. Not because one is being reckless, but because their model treats a particular type of income or commitment differently. A broker’s job is to understand these differences and find the lender whose calculation works best for your situation.
What income counts
If you’re employed on a permanent contract, the calculation is relatively straightforward. Your basic salary forms the foundation. But many lenders will also consider overtime, bonuses, commission, and shift allowances, though how much weight they give these varies.
It gets more complex if you’re self-employed or have non-standard income. Some lenders average your last two or three years of earnings, others use your most recent year, and some will consider retained profits in a limited company. We often speak to self-employed buyers who’ve been told they can’t borrow enough, only to find that a different lender, one that looks at their income differently, gives them what they need.
If you’re buying with a partner, most lenders combine both incomes for the affordability assessment. Joint applications typically allow you to borrow more than you could alone, though both applicants’ debts and commitments are factored in too.
What reduces your borrowing
Lenders look at your committed monthly spending. Credit cards, loans, car finance, student loan repayments, childcare costs, and regular financial commitments all reduce what they’re willing to lend.
One thing that catches people out is unused credit. Even if you haven’t touched a credit card in months, some lenders factor in the available credit limit as if you might use it. Closing cards you don’t need before you apply can sometimes make a meaningful difference to what you’re offered.
If you’re carrying debt, paying some of it down before you apply can improve your affordability. Your deposit plays a role too. A larger deposit means a lower loan-to-value ratio, which can sometimes unlock higher borrowing limits as well as better rates.
Stress testing
Lenders don’t just check whether you can afford the mortgage at today’s rate. They stress test your application against a higher rate to make sure you could still manage if costs increased. This is a regulatory requirement designed to protect borrowers from overextending themselves.
The stress test rate varies by lender and product. It’s one of the reasons you might be told you can’t borrow as much as you expected. The lender is building in a buffer for potential rate rises. This can feel frustrating, especially when you know you could comfortably afford the payments, but it’s there for your protection.
Getting a clearer picture
Online calculators give you a rough idea, but they’re based on general assumptions. They can’t account for how a specific lender would assess your particular income, outgoings, and circumstances. Use them as a starting point, not a definitive answer.
Our mortgage calculator can help you estimate monthly payments based on different borrowing amounts. But for the number that actually matters, what a real lender would offer you, it’s worth having a conversation with an advisor who can look at the detail.
If you’re a first-time buyer trying to work out what you can afford, or you’re moving home and need to know where you stand with a new property, our advisors can run the numbers with you. Get in touch whenever you’re ready. It’s an informal chat, not a commitment.
