Mortgage affordability calculator

A repayment mortgage is an amortising loan: a fixed monthly payment, part interest and part capital, sized so that the balance reaches exactly zero at the end of the term. The payment depends on three things: the amount, the interest rate, and how long you take to repay it.

“What can I borrow?” is simply the same formula turned inside out. Given a payment you can sustain, a rate and a term, there is exactly one balance it clears in time. That is the number this calculator gives you.

What it deliberately does not do is guess your affordability from a salary multiple. Two households on the same income can afford wildly different mortgages depending on childcare, debts, and what they spend. That is a question about your whole financial picture, not about one formula.

A lender will give you a maximum. This calculator gives you what a payment can service. Neither is the amount to borrow, and the distance between them is where the decision actually sits. A lender's maximum is sized on an income multiple and a stress test. The figure worth acting on is sized on the months you already know are coming.

So run it the second way round. Rather than starting from an asking price, start from the payment you could still make in a month that goes wrong: the car needs work, the childcare bill rises, one of you drops a day. That payment produces a borrowing figure of its own. If it lands below the lender's maximum, the gap is not money left on the table. It is the margin that decides whether the next five years are comfortable or tight.

From there you have three levers and they trade against each other. Lowering the price cuts the payment and usually the choice of house. A bigger deposit cuts the payment and delays the purchase while you save it. A longer term cuts the payment and raises the total interest, sometimes by tens of thousands of pounds, so the monthly figure and the total repaid are worth reading as a pair rather than one at a time. Which lever is cheapest to move is a question about your circumstances, not about the formula.

One more question the figure cannot settle on its own: what the payment becomes when the deal ends. Most UK mortgages revert to a different rate after the fixed or tracker period, so put the same borrowing amount back in at a rate two or three percentage points higher and read the monthly payment again. If that version of the number would not have been affordable, it is worth knowing before you offer rather than in year three.

None of this shows the rest of the month. A mortgage payment never arrives on its own. It lands alongside the nursery fees, the car finance, the loan that has two years to run, and whatever the next few years add. The exercise worth doing before you commit is to lay every payment you are already tied to against the same months, including the ones that start and stop, and look at what is left in each individual month rather than on average. CrestCast forecasts a whole household that way, so a mortgage payment can be checked against the years around it instead of against a single month.