Buying & Affordability
What property can I afford?
Most UK lenders cap residential mortgage borrowing at 4.5 times gross household income, with a minority stretching to 5x or 5.5x for strong applicants. A couple earning £80,000 combined can typically borrow £360,000, plus their cash deposit. Loan-to-value (LTV) drives the rate: 95% LTV products are available, but the cheapest pricing sits at 60–75% LTV.
You also need to pass the lender's affordability stress test. Under the Bank of England's current framework, lenders test repayments at a stressed rate (typically the product rate plus a buffer) against your post-tax disposable income. Credit commitments, childcare and student loans all reduce the figure.
Deposit, stamp duty, conveyancing, survey and moving costs come from cash, not the loan. Run real numbers through the mortgage calculator and the stamp duty calculator before viewing properties.
What this means in practice
A nurse and a teacher earning £42,000 and £38,000 (£80,000 combined) with a £40,000 deposit and £350/month childcare commitments approach a mainstream lender. Raw 4.5x multiple suggests £360,000 borrowing — combined with the deposit, a £400,000 home looks reachable. The stress test at the lender's reversion rate plus 1% (typically 8.5–9% in early 2026) cuts that figure by roughly 8–12%, and the £350 childcare reduces it further. Realistic offer: £315,000–£330,000, giving a target purchase price of £355,000–£370,000. SDLT on £370,000 as first-time buyers is £3,500.
Related questions
How much do childcare and student loans reduce borrowing?
Lenders treat regular monthly outgoings as if they were debt. £400/month childcare typically reduces maximum borrowing by £30,000–£40,000 because the lender models the full term. Plan 2 student loan repayments (9% above the £27,295 threshold) reduce affordability roughly £10,000–£15,000 per £10,000 of pre-tax salary above the threshold. Plan 5 (post-2023 starters at 9% above £25,000) is similar. Credit card balances at 5% of the limit, car PCP, and BNPL all subtract from the affordable loan figure.
Can I get a mortgage with bad credit?
Yes, through specialist (sub-prime) lenders such as Pepper Money, Kensington, Bluestone or Aldermore. Pricing is meaningfully higher — expect rates 1.5–3.5% above mainstream and minimum deposits of 15–25%. CCJs satisfied over three years ago, or one missed payment more than 12 months back, increasingly fit prime criteria as scoring algorithms have softened. Bankruptcies and IVAs require six years from discharge for most prime lenders. A qualified broker is essential — DIY applications to mainstream lenders waste credit footprints without traction.
Related reading
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