Mortgage Affordability & Repayments

Use our free calculators to crunch the numbers yourself, and read on to find out how mortgage calculations work. Once you're done, you can access support from our expert mortgage advisers.

How much can you borrow on a mortgage?

Our calculator can give you a basic idea of what you may be able to borrow based on your income. It is determined using the general 4.5 times your income multiple used by many lenders. 

However, it's important to understand that this is a very simplistic way to look at mortgage affordability. The way that lenders assess your affordability is  way more complex than using an online mortgage calculator. 

So how do lenders work out what you can borrow? 

In the past, lenders simply multiplied your salary by a fixed number to determine your loan limit. Today, affordability is calculated through a comprehensive income and expenditure assessment and a rigorous stress test of your entire financial landscape.

1. Assessing your true income

Lenders begin by calculating your total reliable income. This goes beyond just your basic salary. They evaluate:

• Guaranteed Income: Your basic salary, or your net profit/salary and dividends if you are self-employed

• Variable Income: Overtime, bonuses, and commissions. Because this income isn't guaranteed, most lenders will only accept 50% to 60% of these figures when calculating your total income

• Supplemental Income: State benefits, child maintenance payments, or ongoing rental income

The income multiple: Standard lenders may still cap borrowing at 4.5 times your combined annual income, though some professionals or high earners may access up to 5.5 or even 6 times their income. Increasingly we're also seeing higher multiple limits of up to 5.5 times income become available to first-time buyers. 

2. Deducting financial commitments

Once your usable income is established, the lender deducts your non-negotiable financial commitments. This includes:

• Credit Commitments: Outstanding personal loans, car finance (PCP/HP), and the minimum payments on your credit cards

• Living Costs: Childcare costs, school fees, and child maintenance paid out

• Essential Bills: Council tax, ground rent, basic utility bills, childcare costs

3. The affordability stress test

A lender will not just calculate if you can afford the mortgage at today’s interest rates—they are legally required to ensure you can afford it if rates rise significantly.

Lenders apply a stress rate (typically their Standard Variable Rate plus an additional 3%). If your remaining disposable income cannot cover the monthly mortgage payments at this higher stressed rate, the maximum amount they are willing to lend you will be reduced.

Example calculations at 4.5 x your income

Using the calculators on this page gives you free reign to search how much you could borrow on any salary, and how much the repayments would be for any mortgage amount you like. Simply enter your chosen figures and click calculate.

However, to save you some time, we've pulled together pages that show the repayments and affordability for a range of standard mortgage loan sizes. You can access these below:

• Repayments and affordability for a £100,000 mortgage
• Repayments and affordability for a £150,000 mortgage
• Repayments and affordability for a £200,000 mortgage
• Repayments and affordability for a £250,000 mortgage
• Repayments and affordability for a £300,000 mortgage
• Repayments and affordability for a £350,000 mortgage
• Repayments and affordability for a £400,000 mortgage
• Repayments and affordability for a £450,000 mortgage
• Repayments and affordability for a £500,000 mortgage
• Repayments and affordability for a £600,000 mortgage

Other factors that affect mortgage affordability

Alongside your income and outgoings, lenders will also consider: 

• 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 their income

Which supplemental income is accepted by lenders

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. Not all of them allow you to include all of this, but some do. This could dramatically increase the amount you can borrow, so it's important to include anything you think lenders would consider: 

Here are some examples of side earnings you may be able to include, depending on the lender:

• Income from a second job
• Benefits (excluding housing-related ones)
• Bonuses and commission
• Regular overtime
• Investment income
• Rental income
• Freelance work
• Child maintenance payments

Calculate your mortgage repayments

There are many factors that determine how much your mortgage will cost you each month, depending on your personal circumstances, how much you borrow and your mortgage preferences, and even the type of property you plan to buy.

However, you can get a rough estimate of how much your desired loan size would be to repay each month using our repayment calculator, below: 

How our calculator works:

For repayment mortgages, we use the standard amortisation formula (see below). For interest-only, it's simply the loan amount multiplied by the annual rate, divided by 12.

These figures are estimates based on the details you've provided. Actual rates and payments will depend on your personal circumstances and lender criteria.

How mortgage repayments are calculated

While affordability dictates the size of your loan, your monthly repayments dictate your actual monthly outgoings once the mortgage is in place.

Repayments are calculated using a standard 'amortization' formula based on four main variables:

1. The loan amount

This is the total amount you are borrowing. Every pound you borrow must be paid back, plus the interest charged on that specific pound over time.

2. The interest rate and type

This is the cost of borrowing the money, expressed as an annual percentage. Whether you choose a fixed-rate (where the rate stays exactly the same for a set period) or a variable-rate (where the rate fluctuates), the interest is calculated daily or monthly against your remaining loan balance.

3. The mortgage term

This is the total lifespan of the mortgage (typically ranging from 25 to 35 years). However, both shorter and longer terms are availble from some lenders: 

• Shorter terms: Result in higher monthly payments, but you pay significantly less total interest over the life of the loan

• Longer terms: Result in lower, more manageable monthly payments, but the total interest paid balloons over time because you are holding the debt longer

4. Repayment method

How you choose to repay your loan can also impact how much you have to pay back each month:

• Repayment mortgage: Your monthly payment is split into two parts. One part pays off the interest generated that month, and the other part pays down the actual loan balance (the capital). In the early years, your payment is mostly interest. Over time, as the balance shrinks, the portion going toward capital increases

• Interest-only mortgage: Your monthly payments only cover the interest charged for that month. Your underlying loan balance never decreases. This makes monthly payments much lower, but you must have a separate, verified financial vehicle (like an investment portfolio or the planned sale of the house) to pay off the entire loan lump sum at the end of the term

Why choosing the right mortgage product, interest rate, term and repayment method matters:

The below table provides you with some simple examples that show why these things are important to get right when choosing a mortgage.

They are based on the typical UK average property market metrics at the time of writing*:

• Average 3-Bedroom UK Home Price: £285,000

• Assumed Deposit: 15% (£42,750)

• Mortgage Amount Borrowed: (85% LTV): £242,250

• Assumed Benchmark Interest Rate: 4.5% p.a.

*October 2026. Please note that market metrics can change at any time and this is for demonstration purposes only

Monthly repayments comparison bable

Our expert says:

How a mortgage broker can help stretch your affordability & reduce your repayments

Whether you're looking to maximise your borrowing with a specialist lender who will include 100% of your bonus and overtime payments, or you're looking for creative ways to reduce your monthly interest, like an offset mortgage, our expert brokers are here to help. 

At Echo Finance, we have plenty of affordability specialists on the team who can help you with both of these things. They have the knowledge and industry contacts to ensure you secure the most suitable mortgage type, product and term for your needs. 

If you're all done with your affordability calculations, Get your FREE, no-obligation chat with an Echo Finance affordability expert today