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If you are applying for a mortgage, it’s important to do some calculations to work out how much you can borrow and what it will cost.
Here you'll learn how to establish your maximum borrowing and mortgage payments, complete with free calculators for crunching the numbers yourself. You can also access support from our mortgage advisers when you’re done.
How much can you borrow on a mortgage?
The exact amount may vary depending on your personal circumstances and the mortgage lender you borrow from, but the general limit in the UK is 4.5 times your annual salary.
This is the typical cap most mortgage providers won’t go beyond, but a limited number of them might stretch to 5-6 times your income if you have a strong application.
You can use our affordability calculator below to get an idea of your maximum borrowing.
Factors that affect mortgage affordability
Not all mortgage lenders will let you borrow 5 times your annual income or higher, but the ones that do usually insist that you have a strong application to borrow extra.
They will assess whether you fit the criteria for higher borrowing based on these factors:
Income: Applicants on high salaries, generally around £60k per year or more, stand a better chance of securing a higher income multiple than those on low income.
Deposit amount: Some lenders reserve their higher income multiples for borrowers with lower loan-to-value (LTV) ratios. For example, there are providers who will only let you borrow 5-5.5 times salary if your LTV is 85% (15% deposit) or lower.
Profession: There are a select few lenders who will let you borrow up to 6 times salary if you work in a prestigious profession, such as medicine or law.
Whether you’re using a government scheme: Applicants using a scheme such as Shared Ownership are often restricted to 4-4.5 times income.
Supplemental income and outgoings
In addition to your main salary, some mortgage lenders will also let you declare any supplemental income you earn on the side to stretch your mortgage borrowing.
Here are some examples of side earnings you may be able to include:
Benefits (excluding housing-related ones)
Bonuses and commission
Regular overtime
Investment income
Rental income
Freelance work
Not all mortgage lenders will let you declare supplemental income, and some of those that do will only let you include a capped percentage of it on your application.
Moreover, keep in mind that some of your fixed outgoings will also be included in the lender’s affordability calculations. They will usually deduct the following:
Council tax
Utility bills
Broadband
Loan or credit cards agreements
Car payments
Childcare costs
Example affordability calculations
The table below shows how much you can potentially borrow from a mortgage lender with different amounts of income, based on the salary multiples that are available in the UK.
Income | 4.5 x Salary | 5 x Salary | 5.5 x Salary | 6 x Salary |
£25,000 | £112,500 | £125,000 | £137,500 | £150,000 |
£30,000 | £135,000 | £150,000 | £165,000 | £180,000 |
£35,000 | £157,000 | £175,000 | £192,500 | £210,000 |
£40,000 | £139,500 | £200,000 | £220,000 | £240,000 |
£45,000 | £202,500 | £225,000 | £247,500 | £270,000 |
£50,000 | £225,000 | £250,000 | £275,000 | £300,000 |
£55,000 | £247,500 | £275,000 | £302,500 | £330,000 |
£60,000 | £270,000 | £300,000 | £330,000 | £360,000 |
£65,000 | £292,500 | £325,000 | £357,500 | £390,000 |
How a mortgage broker can help stretch your affordability
If you go directly to a mortgage lender, the maximum amount they’re likely to let you borrow is 4.5 times your annual salary, but you may be able to borrow more through a broker.
At Echo Finance, there are advisers on the team who are affordability specialists, and they have the knowledge and industry contacts to maximise your borrowing potential.
Our mortgage brokers can boost your mortgage affordability by…
Finding you a lender who offers mortgages based on higher income multiples
Helping you declare 100% of any supplemental income you have
Providing you with personalised, bespoke calculations
Suggesting ways to strengthen your application so you can access more deals
All done with your affordability calculations? You can book a free, no-obligation chat with an Echo Finance broker below to find out how much they can help you save:
Begin your mortgage journey
How are mortgage repayments calculated?
The amount your mortgage will cost each month and overall will depend on the amount you borrow, the interest rate you get, the term you take it over and the product type.
When you take out a mortgage, you are charged interest on the amount you have borrowed and need to pay this back in monthly instalments over the agreed team. Most residential mortgage agreements also require you to pay back some of the capital each month too.
Use our repayment calculator below to get an idea of how much your mortgage will cost:
Factors that affect mortgage repayments
As we’ve already touched on, there are key variables that shape how much your mortgage will cost, in addition to the amount you are borrowing. We have broken them down below:
Interest rate: The interest rate that you qualify for will be determined by how much deposit you have (LTV ratio) and the overall strength of your application. The higher the interest rate, the more your mortgage repayments will be each month.
Term length: A standard mortgage term is 25 years but longer and shorter agreements are available. Spreading the debt out over a longer period can mean lower monthly repayments but paying more in interest overall across the term.
Product type: Interest is charged differently for different mortgage product types, so the monthly cost varies too. The most common product type is a fixed-rate mortgage where the rate of interest is static for an agreed initial period, typically 2-5 years. The main alternative is variable rate mortgages, where monthly payments can fluctuate.
Repayment type: Most mortgages in the UK have a repayment type of either capital repayment or interest-only. With a capital repayment mortgage, you pay off some of the capital plus interest each month, but with interest-only, you only pay the interest and have to settle the debt with a ‘repayment vehicle’, such as selling the property.
Factors such as credit history and deposit amount can have a direct impact on your repayments as they determine the strength of your application, which can affect your rate.
Example repayment calculations
The tables below show examples of how mortgage repayments can vary based on the factors outlined in the sections above. We have used a mortgage amount of £225k for these calculations, which is roughly the average size of a typical residential mortgage in the UK.
Repayments by interest rate
This table shows how your monthly and overall mortgage costs change based on the interest rate you secure. These calculations are for a £225,000 mortgage with a 25-year term.
Interest Rate | Monthly Payment | Overall Repayment |
3.50% | £1,129 | £338,559 |
4% | £1,188 | £356,307 |
4.50% | £1,249 | £374,562 |
5% | £1,311 | £393,288 |
5.50% | £1,375 | £412,455 |
6% | £1,440 | £432,033 |
Repayments by term length
This table illustrates how the length of your mortgage term affects your payments. A shorter term means higher monthly payments but less interest paid overall. These calculations are for a £225,000 mortgage with a fixed interest rate of 4.5%.
Mortgage Term | Monthly Payment | Overall Repayment |
10 years | £2,320 | £278,418 |
15 years | £1,721 | £309,724 |
20 years | £1,425 | £341,954 |
25 years | £1,249 | £374,562 |
30 years | £1,140 | £410,422 |
35 years | £1,069 | £448,892 |
Interest-only mortgage repayments
This table shows the monthly payment for an interest-only mortgage based on different interest rates and an example loan amount of £225k. With this type of mortgage, your payments only cover the interest and do not reduce the loan amount.
Mortgage Amount | Interest Rate | Monthly Payment |
£225k | 3.50% | £656.25 |
£225k | 4% | £750.00 |
£225k | 4.50% | £843.75 |
£225k | 5% | £937.50 |
£225k | 5.50% | £1,031.25 |
£225k | 6% | £1,125.00 |
What to do after running your calculations
Now that you have run the numbers and have a better idea of how much you can borrow on a mortgage and what it will cost, your next step should be to speak to a mortgage broker.
One of our advisers can provide you with bespoke calculations for the amount you can afford to borrow, and then help you secure the best deal possible for a mortgage of that amount.
Here are just some of the reasons why people choose Echo for their mortgage needs:
Our brokers are whole-of-market and 100% independent
They can access exclusive rates and deals
They can draw up bespoke affordable and repayment calculations for you
Your initial consultation with us will be free
Ready to take advantage of a free, no-obligation chat with one of our mortgage brokers to find out how much they could help you save? Get started here.
FAQs
The salaries of both applicants are combined to form a household income and the mortgage lender will apply their income multiple to this figure to work out maximum borrowing.
Any supplemental income can also be tallied up and included with lenders who allow this, although some will place a cap on the percentage of secondary income you can declare.
Find your local adviser
- Residential mortgages: Everything from fixed-rate to tracker mortgages for first-time buyers, homemovers and remortgage borrowers
- Specialist mortgages: For borrowers who fall outside of standard lending criteria, including people with bad credit, self-employed professionals and more
- Later-life lending: Including advice on equity release, mortgages for pensioners and retirement interest only (RIO) mortgages
- Bridging & Commercial: We have specialist advisors on hand for commercial mortgages, bridging loans, development finance and more
- Insurance & Protection: Including life, home and critical illness cover for families and individuals, as well as landlord and business protection insurance
Echo Finance is regulated by the Financial Conduct Authority and is reviewed annually by an independent compliance company. All of our brokers and advisers hold industry-standard qualifications, such as CeMAP, CeRER and DipMap, where required.
We are committed to providing advice through the channels that best suit your needs. Our brokers can provide advice via phone, email, video and web chat from anywhere in the UK, but we also aim to offer face-to-face appointments for those who request them.