Posted on: September 1, 2026
Mortgage Affordability: How Much Could You Borrow?
For many people, the biggest question when looking to buy a home is simple: how much can I borrow?
Mortgage affordability is about much more than simply multiplying your salary by a set number. Lenders look at your income, regular expenditure, financial commitments, deposit, credit history and the mortgage term you are considering to establish whether the mortgage is affordable both now and in the future.
Here’s a closer look at how lenders assess affordability, and some of the options that could help.
How do lenders work out how much someone can borrow?
Every lender has its own affordability criteria, which means the amount you can borrow can vary considerably between providers.
A lender will typically start by looking at your income. This may include your basic salary, overtime, bonuses, commission, pension income or other sources of income, although different lenders have different rules about which types of income they will accept and how much they will take into account.
Your outgoings are just as important. Lenders need to consider regular commitments such as loans, credit cards, car finance, childcare and other household costs, as well as essential spending such as council tax, utilities, food and insurance.
The lender will also look at the mortgage payment itself and assess whether you could continue to afford it if circumstances change. This can include testing affordability against a higher interest rate, depending on the mortgage and the lender’s criteria.
This is why two people with exactly the same salary can potentially have very different borrowing capacities.
Your credit profile, employment circumstances, deposit and the property itself can also influence the lender’s decision. There isn’t one universal affordability calculation used by every lender, so understanding the wider market can be particularly valuable.
Can a bigger deposit help?
A larger deposit can make a significant difference.
For example, if you were buying a £300,000 property with a £15,000 deposit, you would need a £285,000 mortgage – a 95% loan-to-value (LTV) mortgage.
If you were able to put down £45,000 instead, your mortgage would reduce to £255,000 and your LTV would fall to 85%.
A lower LTV can give you access to a wider range of mortgage products and potentially more competitive interest rates. It also means you are borrowing less relative to the value of the property, which can reduce your monthly mortgage payments.
However, waiting to build a larger deposit isn’t necessarily the right answer for everyone. If you’re currently paying rent, for example, the benefit of saving for longer needs to be weighed against the cost of continuing to rent and the possibility that property prices or mortgage rates could change.
The right deposit is therefore about more than simply reaching the biggest possible percentage. It’s about finding a balance between the amount you put into the property and keeping enough money available for moving costs and a financial safety net.
What options are available for first-time buyers?
First-time buyers can face a particular affordability challenge. It can be difficult to build a sizeable deposit while also trying to get on the property ladder, particularly where house prices are high compared with local incomes. Many lenders have recognised this problem, and can offer higher income multiples, even with a lower deposit, of up to 6 times income.
What about home movers?
Affordability isn’t just a first-time buyer issue.
Existing homeowners may want to move because their family has grown, they need more space, or they simply want a different type of property. But the amount they can borrow for their next home will depend on their existing mortgage, the equity they have built up, their income and their current financial commitments.
The good news is that lenders are keen to help with home movers as well.
Could a longer mortgage term increase affordability?
Another option that can make a difference is the mortgage term.
A longer term spreads the mortgage repayment over more years, which generally reduces the required monthly payment. This can improve affordability and, in some circumstances, allow a borrower to meet a lender’s affordability assessment for a larger mortgage.
For example, a mortgage taken over 35 years will generally have a lower monthly repayment than the same mortgage over 25 years, assuming the same interest rate.
However, there is an important trade-off. A longer mortgage term usually means paying interest for longer, so the total cost of the mortgage can be significantly higher.
There can also be age-related considerations. Lenders will look at how far into retirement the mortgage extends and whether the proposed repayments remain affordable over the full term.
A longer term can therefore be a useful affordability tool, but it shouldn’t automatically be viewed as the best solution. An adviser can help you compare the monthly payment against the overall cost of borrowing.
Mortgage Affordability isn’t just about borrowing the maximum
It can be tempting to focus on the biggest mortgage a lender is prepared to offer.
But maximum borrowing and comfortable borrowing aren’t necessarily the same thing.
A mortgage should leave you with enough disposable income to manage your normal household costs, cope with unexpected expenses and continue enjoying your lifestyle.
It’s also worth considering what might change in the future. Your household could grow, childcare costs could increase, your income could change, or your mortgage payment could rise when a fixed-rate deal ends.
A good affordability assessment therefore isn’t simply about finding the highest figure a lender will accept. It’s about understanding what level of borrowing makes sense for your circumstances.
How can a mortgage adviser help?
Mortgage affordability can vary from lender to lender, which is where professional advice can add value.
An adviser can look at your individual circumstances, compare lender criteria and identify potential solutions – whether that’s a larger deposit, a different lender, a longer term, a specialist first-time buyer product or simply adjusting the property budget.
They can also help you understand the difference between what you could borrow and what you may actually want to borrow.
Summary
Mortgage affordability is much more than a simple salary calculation.
Lenders look at your income, expenditure, financial commitments, deposit, credit profile and the proposed mortgage term, as well as the potential impact of future interest rates and changes in your circumstances.
A bigger deposit can reduce your LTV and potentially improve the mortgage rates available to you. First-time buyers may also have access to specific products, such as Nationwide’s Helping Hand, designed to increase borrowing capacity for eligible applicants. Home movers can benefit from reviewing the wider market too, while extending the mortgage term may reduce monthly payments – although it can increase the total cost of borrowing.
Ultimately, there is no single borrowing figure that works for everyone. The most suitable mortgage is not necessarily the one that allows you to borrow the most, but the one that fits comfortably within your wider financial plans.
If you’re considering buying your first home, moving house or simply want to understand how much you could realistically borrow, speaking to a mortgage adviser can help you understand your options and make an informed decision.
We hope this article helped you to understand mortgage affordability. If you have any more questions or need further assistance, feel free to get in touch.
Craig Power craig.power@villagefs.co.uk or Luke.spires@villagefs.co.uk.
The information contained within was correct at the time of publication but is subject to change. This content is for information purposes only and does not constitute as advice
01.09.2026.
Your home may be repossessed if you do not keep up repayments on your mortgage.
