What is a mortgage calculator?

A mortgage calculator is a handy tool that calculates different aspects of a mortgage, such as how much you can borrow and what your repayments are likely to be.

Our mortgage calculator uses your information to estimate your potential borrowing amount or monthly repayment.

When using our mortgage calculator, it's important to remember that it's only designed to indicate how much you could borrow and doesn't take into account all the aspects that will affect your ability to get a mortgage or impact the amount you're able to borrow.

How much can I borrow?

Before starting your house-hunting journey, you'll need to find out how much you'll be able to borrow because you'll get a better idea of the price range for the houses you can consider.

It's often said that an approximate calculation of your borrowing capacity is based on a multiple of your annual income, usually around three to four times your salary. While this provides a basic estimate, the actual borrowing amount hinges on various factors.

Our mortgage affordability calculator can give you a more accurate estimate of how much you'll realistically be able to borrow.

It's important to remember that a few factors can affect your mortgage affordability that the calculator won't consider. These include:

• Your credit score
• Your monthly expenses
• Costs associated with buying a house (such as stamp duty or conveyancing fees)
• Changes in your mortgage interest rate

How do lenders calculate affordability?

Lenders look at various factors to assess how much you can afford to borrow, such as your income, outgoings and credit history.

Each mortgage provider will have different criteria to determine how much and whether they're willing to lend you money, but most will look at the following:

• Your annual income - This includes your basic salary but can also include any bonuses or additional income you receive.
• Expenses and existing debts - Lenders will look at your regular monthly outgoings, financial commitments and debts to see whether you can afford monthly repayments.
• Credit history - Your credit history tells lenders how reliable a borrower you are. If you have a history of missing repayments or not making full repayments on your debts, lenders are less likely to want to lend to you or will offer to lend you smaller amounts of money with a higher interest rate.
• Current and potential interest rates - If interest rates are currently high, the amount you'll be able to borrow will likely be lower because you'll be paying more towards interest. Lenders will also stress test your ability to repay the mortgage even if interest rates were to rise in the future.
• Type of mortgage - Different types of mortgages will typically have different affordability criteria.