A salary is only one part of the answer. With £55,000.00 of annual gross household income and an entered 4.5× planning multiple, the salary screen is £247,500.00. In the complete starting scenario below, the affordable property-price ceiling is £200,000.00; the tightest constraint is deposit, tax and purchase cash.
The same page answers two questions: how much mortgage might your income support, and can your savings actually fund the home you want? The figures are indicative planning results, not an agreement in principle, mortgage offer or property valuation.
Three checks before you choose a price
Borrowing capacity and buying capacity are different. A lender may be comfortable with a repayment while your savings are insufficient for completion. Equally, a large deposit does not make a payment sustainable if the household budget is already stretched.
| Check | What this page tests | What you need to enter |
|---|---|---|
| Income | A selected multiple of gross annual income | Income a lender may accept and a planning multiple |
| Repayments | Capital-and-interest repayments at a higher planning rate | Take-home income, spending, debts and owner costs |
| Purchase cash | Deposit, purchase tax and cash-paid costs | Savings, retained reserve, deposit share and fees |
Salary is a starting point, not a promise
The income multiple below is editable. It is a screening assumption, not a universal individual borrowing limit. A lender may treat salary, overtime, bonuses, self-employed earnings, benefits and joint income differently. Credit history, employment evidence, age, retirement plans and the selected product also matter.
Keep annual gross income separate from monthly take-home income. The first drives the multiple; the second funds the bills. This page does not estimate income tax or National Insurance: enter the amount that actually reaches the household each month.
Build the household scenario in the text
Every underlined value is editable. Start with bank statements and product quotes. Exclude rent that will stop after buying from living costs, but include food, utilities, childcare, transport and regular saving you want to continue. Put continuing debt payments in their own field and avoid counting them again in living costs.
Your borrowing screen
The smaller of the income and repayment-budget results becomes the borrowing screen. A spending budget is personal: the calculation is only as useful as the costs included. A zero or negative surplus cannot support a new mortgage payment.
Gross income × multiple
This is a transparent assumption you can change after speaking to a lender or broker.
What the budget supports
Take-home income of £3,400.00 less £1,300.00 living costs, £150.00 debt payments and £250.00 owner costs leaves £1,700.00 before the mortgage. At 6.5% over 30 years, that payment budget supports £268,958.39 of repayment borrowing.
The smaller borrowing screen is income multiple: £247,500.00. At a 10% deposit, the purchase-price ceiling is £200,000.00 after including SDLT and your entered costs.
Can the savings fund your chosen home?
The deposit becomes equity. Purchase tax and fees consume cash without reducing the loan. Your retained reserve is excluded before comparing savings with completion costs. The selected deposit percentage is held constant: spare cash is not automatically converted into a larger deposit.
Deposit, tax and entered costs
The 10% deposit on the £250,000.00 home is £25,000.00. Add £0.00 SDLT and £5,000.00 of entered costs: £30,000.00 in total. Savings after your reserve are £25,000.00, leaving a £5,000.00 cash gap.
SDLT applies in England and Northern Ireland, LBTT in Scotland and LTT in Wales. Select first-time-buyer treatment only where you satisfy the relevant conditions. Wales has no separate first-time-buyer rate schedule. The additional-property option uses the corresponding higher-rate treatment; special transactions and transitional cases need a separate review.
What a higher rate changes
The uplift is your own planning scenario. It is not presented as a fixed FCA requirement or a lender's stress rate. The comparison reprices the full starting mortgage over the entered term; it is not a forecast of a future remortgage, which would use the balance and term remaining at that date.
| Monthly measure | Entered rate: 4.5% | Planning rate: 6.5% |
|---|---|---|
| Mortgage repayment | £1,140.04 | £1,422.15 |
| Money left after entered costs | £559.96 | £277.85 |
The selected loan costs £1,140.04 a month at 4.5% and £1,422.15 at 6.5%. The payment changes by £282.11; the rate test uses the same starting loan and full 30-year term.
For the chosen home, mortgage borrowing is 4.09× of annual gross income. Mortgage payments plus additional owner costs are 40.88% of monthly take-home income at the entered rate. These use different income bases and are descriptive ratios, not universal approval thresholds.
The property-price ceiling in this scenario
The model first converts the borrowing screen into a price at your selected deposit share. It separately finds the highest price whose deposit, tax and entered costs fit available cash. The smaller result is the price ceiling; it is not a recommended spending target.
The tightest constraint is deposit, tax and purchase cash.
At the model ceiling, £20,000.00 of deposit and £0.00 SDLT combine with £5,000.00 of costs. The loan is £180,000.00; payments are £912.03 at the quoted-rate assumption and £1,137.72 at the planning stress rate.
If the ceiling is zero, your entered budget or cash cannot fund a purchase within this page’s property-price range. The model still shows the selected property's costs so you can identify the gap. Setting the deposit to 100% models a cash purchase, while entered owner costs still have to fit the monthly budget.
Does changing the deposit solve the problem?
These alternatives keep the target home, incomes, costs, term and both interest-rate assumptions unchanged. A larger deposit reduces borrowing but uses more cash. A smaller deposit preserves cash but requires a larger loan. The last column tests all three constraints, not just the size of the deposit.
| Deposit share | Target loan | Target cash | Price ceiling | Chosen home |
|---|---|---|---|---|
| 5% | £237,500.00 | £17,500.00 | £260,526.31 | Fits the plan |
| 10% | £225,000.00 | £30,000.00 | £200,000.00 | Exceeds the plan |
| 15% | £212,500.00 | £42,500.00 | £133,333.33 | Exceeds the plan |
| 20% | £200,000.00 | £55,000.00 | £100,000.00 | Exceeds the plan |
This is not a table of current mortgage-rate tiers. Loan-to-value is the loan divided by the property value used by the lender. Actual pricing also depends on the product and borrower, and a lower valuation can require more equity. Enter real quotes before deciding that changing the deposit will save interest.
Your decision checks
| Check for the chosen home | Result |
|---|---|
| Mortgage within the selected income multiple | Within the entered limit |
| Higher-rate repayment within the household budget | Within the entered limit |
| Deposit, purchase tax and costs within available cash | Outside the entered limit |
For the £250,000.00 home, the required mortgage is £225,000.00 and cash is £30,000.00. The cash shortfall is £5,000.00; the mortgage exceeds the borrowing screen by £0.00. After the entered household costs, the higher-rate payment leaves £277.85 a month. The maximum price at the selected deposit share is £200,000.00. This is an indicative model, not lender approval.
What to change when one check fails
A cash gap calls for a lower purchase price, more savings, lower quoted costs or a different deposit share that still passes the loan checks. A repayment gap calls for a smaller loan, lower ongoing commitments or a sustainable change to the term or product. Increasing the income multiple alone does not fix an exhausted take-home budget.
Recheck all three after every change. Lengthening the term can reduce monthly payments while increasing lifetime interest and moving repayments into retirement. Keep an emergency reserve and room for irregular repairs instead of treating the model ceiling as the household's target.
Methodology and scope
The income screen is annual gross income multiplied by the selected multiple. The payment budget is monthly take-home income minus living costs, continuing debts and additional owner costs, floored at zero. The budget loan is the present value of that payment over the entered whole-year term at the entered rate plus the uplift. The smaller loan screen is divided by the financed share of the property price.
The separate cash calculation reuses MMDAI's UK purchase model: selected deposit percentage × price, plus the relevant residential purchase tax and the five cash-paid allowances. A numerical search finds the cash-constrained price, including tax-band changes and first-time-buyer relief discontinuities. The lower of the cash and borrowing price screens is displayed to the penny without rounding the ceiling upward.
This covers an illustrative capital-and-interest residential mortgage. It does not reproduce lender underwriting, calculate your tax deductions, fetch mortgage rates or determine relief eligibility. It omits fees added to borrowing, interest-only products, lender valuation gaps, credit scoring, age/retirement restrictions, foreign-currency income, sale proceeds, bridging, shared ownership, leases, linked/mixed-use purchases, companies and unusual reliefs. Fees and owner costs are entered estimates, not national averages.
- MoneyHelper — income, expenditure and mortgage affordability
- FCA — interest-rate stress assessment and lender flexibility
- MoneyHelper — deposits and loan-to-value
- Nationwide — mortgage terms and its 40-year maximum
- GOV.UK — residential SDLT rates and first-time-buyer relief
- GOV.UK — non-resident SDLT surcharge
- Revenue Scotland — residential LBTT and first-time-buyer relief
- Revenue Scotland — Additional Dwelling Supplement
- Welsh Government — LTT main and higher residential rates