Almost everyone starts in the same place: how much can I borrow? There is no single answer, because mortgage affordability is about far more than your salary.
A lender looks at what you earn, what you already owe, how big your deposit is, and whether you could still keep up the payments if interest rates went up. Because each lender weighs those things differently, two lenders can look at exactly the same person and offer amounts tens of thousands of pounds apart.
This guide explains how mortgage affordability works in plain English, where the well-known “4.5 times your salary” figure actually comes from, and what you can do to improve your position before you apply.
What is mortgage affordability?
Mortgage affordability is the lender’s judgement about whether you can comfortably keep up the repayments on the mortgage you have applied for.
It is a much wider test than a credit check. A lender builds a picture of your whole financial position: your income, your regular commitments, the size and length of the loan, and what the monthly payment would be. Only then does it decide what it is willing to lend.
Where the rules come from. Today’s approach dates from the Mortgage Market Review in April 2014, which required lenders to verify income and assess affordability properly rather than lend on a simple salary multiple. The rules sit in the FCA’s responsible lending handbook, MCOB 11.6.
How much can I borrow on a mortgage?
As a rough guide, most lenders will consider somewhere between four and four and a half times your annual income. That is the usual starting point on the high street.
It is not a ceiling. A number of lenders will go to five or five and a half times income, and some higher still, for borrowers who fit their criteria — typically those with a larger deposit, a higher income, or a particular profession. Equally, someone on the same salary can be offered considerably less if they already have significant monthly commitments.
For a joint application, lenders will usually consider both applicants’ eligible income together.
Where the “4.5 times salary” figure comes from
This is the part most guides leave out, and it explains a lot.
The Bank of England sets a limit on how much high loan to income lending the market can do. Lending at 4.5 times income or above is capped as a proportion of each lender’s new business, not banned outright. So 4.5 is a regulatory dividing line, not a maximum you personally can borrow. Whether a lender will go above it depends on how much room it has left.
The rule: the loan to income (LTI) flow limit. Set by the Bank of England’s Financial Policy Committee, it limits new residential mortgages at an LTI of 4.5 or above to no more than 15% of a lender’s new lending each year. In July 2025 the Committee recommended that individual lenders be allowed to exceed that share, provided the market total stays consistent with 15%. The Bank and the FCA put interim arrangements in place straight away and are now consulting on removing the individual lender cap altogether, with changes expected later in 2026. This is a large part of why higher income multiples have become easier to find.
What income will lenders count?
Salary is rarely the whole picture. Depending on the lender, the following may also be taken into account:
- bonus, overtime and commission, usually averaged over one to two years
- self-employed profit, or salary and dividends, normally evidenced by two years of accounts or tax calculations, though some lenders will consider one
- rental income from other property
- pension income, and in some cases certain benefits
- income paid in a foreign currency, with a smaller group of lenders
How much of each a lender accepts varies enormously. One might count all of a regular annual bonus; another might count half, or none. For anyone whose earnings are not a straightforward monthly salary, choosing the right lender matters more than almost anything else you can do.
What reduces how much you can borrow?
Lenders look at both sides of your finances. Ongoing commitments reduce the amount available, and the usual ones are:
- credit cards, personal loans, car finance and overdrafts
- childcare costs, school fees and maintenance payments
- student loan repayments, which reduce your take-home pay
- costs on any property you already own
The mortgage itself is part of the calculation too. A shorter term means a higher monthly payment, which usually means a smaller loan. Stretching the term reduces the monthly cost and can increase what you are offered, although you pay more interest overall.
What is a mortgage stress test?
A stress test checks whether you could still afford the payments if interest rates rose. The lender recalculates your affordability at a higher rate than the one you are applying for.
This rate — the lender’s stress rate — often matters as much as the income multiple. Two lenders using the same multiple but different stress rates will reach different answers.
The rule: MCOB 11.6.18R. Lenders must consider the effect of likely interest rate rises over at least the first five years of the mortgage, assuming a rise of at least one percentage point. The requirement does not apply in the same way where the rate is fixed for at least five years from the start, which is one reason a longer fixed rate can sometimes allow a larger loan. Separately, the Bank of England withdrew its own affordability test in August 2022; the FCA rule stayed in place.
The picture changed again in March 2025, when the FCA reminded lenders how much flexibility the rule allows and pointed out that overly cautious stress rates were shutting out borrowers who could genuinely afford a mortgage. Around 85% of the market has since updated its approach, and the FCA reported that the industry is able to offer around £30,000 more to many borrowers as a result.
“The phrase I hear most often is “the bank said no, so that’s that”. It very often isn’t. There is no single national affordability calculation — there are dozens of different lender models, and on identical income and identical commitments the gap between the most and the least generous can run to tens of thousands of pounds. What has changed since 2025 is that the spread has widened rather than narrowed. If you were turned down a couple of years ago, that tells you what one lender thought on one day. It does not tell you what the market would say today.”
Hiten Ganatra, Managing Director, Visionary Finance
How does your deposit affect what you can borrow?
Your deposit sets your loan to value, or LTV — the size of the loan as a percentage of the property price. A £40,000 deposit on a £200,000 home is an 80% LTV.
A lower LTV helps in two ways. Rates improve at each band, typically 95%, 90%, 85%, 80% and 75%, so the monthly payment falls and affordability improves. And some lenders reserve their most generous income multiples for borrowers with a larger deposit.
That is worth weighing against paying down debt. Clearing a credit card can improve affordability, but not if it leaves you short of the deposit you need to reach a better LTV band. This is a particularly common trade-off for a first-time buyer.
Are mortgage affordability calculators accurate?
An online mortgage affordability calculator is a useful guide, not a decision. Most work from income and a fixed multiple, so they cannot reflect a particular lender’s treatment of bonus income, self-employed profit, childcare costs or your credit history.
Use one to get a broad sense of what is realistic, then check it against real lender criteria before you start viewing properties or making offers. Our mortgage repayment calculator will show you what a given loan would cost each month.
How can you improve your mortgage affordability?
If you are planning to apply in the next few months, a few things genuinely help:
- Reduce or clear short-term debt, keeping enough back for your deposit and moving costs.
- Avoid taking on new credit in the run-up to an application. A new car finance agreement can cost you far more in borrowing capacity than it costs you a month.
- Check your credit file with all three agencies and correct any errors early, so they do not surface mid-application.
- Register on the electoral roll at your current address.
- Keep your bank statements tidy for around three months before applying. Lenders review recent spending.
- Gather evidence of variable income — payslips showing bonus or commission history, or two years of accounts if you are self-employed.
- Consider the term. A longer term lowers the monthly payment and can increase what you are offered.
What is changing in 2026?
The FCA is part-way through its Mortgage Rule Review, which is looking at how to widen access without weakening lending standards. Its consultation on helping first-time buyers and underserved borrowers, CP26/18, closed on 28 July 2026, with a policy statement expected in the second half of the year. The proposals cover people with variable or irregular income, older borrowers, those paid in a foreign currency, and borrowers with historic credit problems.
Some of this has already happened. In July 2025 the FCA confirmed rules that let a lender apply a lighter affordability assessment when you remortgage to a new lender, provided the new mortgage is more affordable than your current one or than the best deal your existing lender will offer you. The rules are permissive, so it is up to each lender whether to use them, and not all do.
Alongside that, the Bank of England and the regulators are consulting on removing the individual lender cap on high loan to income lending.
The direction of travel is towards more flexibility. If you were told no a few years ago, the answer today may be different.
Find out what you could actually borrow
A broker can look past a basic salary multiple. We assess how your income is structured, what your commitments really cost you in borrowing capacity, and which lenders’ criteria fit your circumstances — before you start making offers.
Speak to Visionary Finance on +44 (0) 1908 465 100.
Common questions
How many times my salary can I borrow?
Four to four and a half times income is the usual starting point. Some lenders offer five to five and a half times, or more, for borrowers who meet their criteria. Your existing commitments and your deposit both affect the final figure.
Do I still have to pass a stress test?
Yes. The Bank of England withdrew its own affordability test in 2022, but the FCA’s rule remains and lenders still apply their own stress rates. The test does not apply in the same way where your rate is fixed for at least five years.
Does a bigger deposit mean I can borrow more?
Often, yes. A larger deposit means a lower loan to value, which usually means a better rate, a lower monthly payment and better affordability. Some lenders also reserve higher income multiples for lower LTV cases.
Can I get a mortgage if I am self-employed?
Yes. Most lenders want two years of accounts or tax calculations, although some will consider one year. How your profit is assessed varies between lenders, which makes lender choice particularly important.
Will my student loan affect how much I can borrow?
Indirectly. Student loan repayments reduce your take-home pay, so they reduce the amount available to service a mortgage. They are not treated in the same way as a credit card or personal loan.
This article is general information about how mortgage lending works and is not advice. It is not tax advice. Lending criteria, interest rates and regulatory rules change; the position described is correct at the date of publication.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Visionary Finance Ltd is authorised and regulated by the Financial Conduct Authority. The FCA does not regulate certain types of mortgage, including some buy-to-let, international, bridging and commercial mortgages.
