How to calculate the maximum you could afford to borrow through a mortgage

06/06/2026

Whether you’re a first-time buyer or moving up the property ladder, when you start searching for a new home, one of the most important questions is: What is my budget?

If you’ll be using a mortgage to buy a home, understanding the maximum you can borrow may help you narrow down your search and understand the type of home you might be in a position to buy.

However, while some general rules could help you calculate how much you can borrow, it’s not always straightforward. Previously, most lenders would allow you to borrow up to 4.5 times your annual salary through a mortgage. Some lenders have recently relaxed their affordability criteria and may allow you to borrow up to 6 times your annual salary in some circumstances.

Other lenders might consider other sources of income when assessing your affordability too.

While multiplying your salary could provide you with a useful indicator of how much you might be able to borrow, it’s not the only factor that’s considered.

Lenders will review other factors alongside your salary

Lenders don’t only consider your salary when reviewing your application. They’ll also calculate how much of a risk you pose and the likelihood of you defaulting on the debt.

As a result, if they believe you’re a risk, the amount you can borrow might be less than you expect, or you may be required to provide a higher deposit to offset some of the perceived risk.

The amount you could borrow through a mortgage might be lower if you have other financial commitments, such as loans or credit cards, or if you’ve previously missed credit repayments.

You can review your own credit report before you make a mortgage application. This could highlight potential red flags that may affect how a lender views you.

In some cases, there might be steps you can take to boost your credit score. For example, closing old accounts and clearing debt where possible could make your application more attractive.

A mortgage in principle could help you manage your property budget

Applying for a mortgage in principle, also known as an “agreement in principle” or a “decision in principle”, may provide a more accurate way to assess how much you might be able to borrow.

Usually, you can apply for a mortgage in principle online and receive a response within a few minutes. You’ll need to enter some information, such as your income, dependents, and the rough value of the property you intend to buy. Using these details, the lender will indicate how much you may be able to borrow.

The results could give you a better idea of your budget, and it can demonstrate to sellers that you’re in a position to buy. A mortgage in principle is usually valid for up to 90 days, but you can often extend it or reapply if you don’t find the property for you during that time.

However, it’s important to note that a mortgage in principle is not a guarantee. The lender won’t carry out a hard credit check until you apply for a mortgage, so the amount they’re willing to lend you could change.

When you’re ready to apply for a mortgage, you don’t need to choose the same lender that you received a mortgage in principle from.

Yet, it’s worth considering which lender to use for a mortgage in principle, as the amount they may be willing to lend you could vary significantly and affect your property search. If you’d like help comparing different lenders and understanding which could be right for you, please get in touch.

Assessing your affordability could help manage your budget

While it can be tempting to see the maximum amount you can borrow and search for properties at the top end of your budget, assessing your affordability first might be useful.

While a lender may be confident you could meet repayments, how do you feel about the financial commitment you could be making? You might have other financial priorities that would make the repayments difficult. So, taking some time to understand what the repayments could mean for you may help you feel more confident as you take this next step.

Get in touch to talk about your mortgage options

If you’d like to understand how much you could borrow through a mortgage and what it could mean for your repayments, please get in touch. We can offer you guidance as you apply for a mortgage in principle and support once you’re ready to secure a mortgage to buy your next home.

Please note:

This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.

Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.