How mortgage affordability is calculated in 2026
Understanding how mortgage affordability is assessed can help you feel more confident when planning for a move or preparing to speak with an adviser. This guide explains the process in clear, accessible language that aligns with how people search online, including the detailed steps lenders commonly follow.
This article focuses on general information only. It does not offer advice or guidance on personal circumstances.
What does mortgage affordability mean?
Mortgage affordability is an assessment lenders use to understand whether your monthly mortgage payments are manageable based on your current financial position. It helps lenders decide how much you may be able to borrow and ensures repayments remain sustainable.
The main factors lenders assess
Lenders review several areas of your finances. Each one contributes to the overall picture of what you can afford.
Your income
Lenders look at all sources of regular income, such as:
Salary
Self employment income
Bonuses and overtime
Regular allowances
They may ask for payslips, bank statements or tax documents to confirm these figures.
Your committed outgoings
These are financial commitments that cannot easily be changed. They often include:
Loans and credit card payments
Car finance
Personal loans
Childcare costs
Maintenance payments
These outgoings reduce the amount of income available for mortgage payments, so lenders factor them into their decisions.
Your general spending
Some lenders also look at day to day spending to understand your typical monthly expenditure. This can include:
Utilities and household bills
Food and fuel
Subscriptions
Travel costs
This helps lenders work out how much disposable income remains after essential spending.
Your credit history
Your credit record shows how you have managed borrowing in the past. Lenders may review:
Your repayment history
Any missed or late payments
Credit utilisation
The number of active accounts
This forms part of their assessment of financial behaviour and reliability.
Your deposit
The size of your deposit influences affordability because it affects the loan to value ratio. A higher deposit reduces the amount you need to borrow and can offer more choice. The lender may also offer you a more competitive rate of interest if you have a larger deposit.
Your financial stability
Lenders may also consider other elements such as:
Length of employment
Income consistency
Contract type
How long you have lived at your current address
These factors help lenders understand how stable your financial situation is.
How lenders calculate what you can borrow
Lenders usually start with your verified income and then deduct your committed outgoings and an estimate of your average spending. They then apply their own internal affordability models to calculate the maximum monthly payment they think is sustainable.
This results in a figure that represents what they believe you can afford to pay each month. They then use this to determine how much they would lend you.
Different lenders use different methods, which is why borrowing amounts can vary.
Why affordability checks are important
Affordability assessments:
Help ensure the mortgage is sustainable
Reduce the risk of financial strain
Give lenders confidence that payments can continue if circumstances change
They exist to ensure the mortgage fits your financial situation both now and in the future.
How to feel more prepared
Although every lender has its own criteria, many people find it helpful to:
Gather key documents such as payslips and bank statements
Review regular spending and financial commitments
Understand the main factors lenders look at
Check their credit report for accuracy
Being organised can make the mortgage process feel more manageable and help you feel more in control.
Frequently asked questions
How do lenders calculate mortgage affordability?
Lenders assess your verified income, deduct committed outgoings and consider typical monthly spending. They then apply their own internal affordability models to estimate a sustainable monthly payment.
What income is usually included in an affordability check?
Regular and reliable income such as salary, self employment earnings, bonuses and allowances may be considered. Each lender uses its own criteria.
Does my day to day spending affect affordability?
Some lenders review everyday spending, including bills, food, travel and subscriptions, to understand how much disposable income remains after essential costs.
Can my credit history change what I can borrow?
Your credit record may influence affordability because it shows how you have managed borrowing in the past. Lenders may review repayment behaviour, missed payments and credit utilisation.
Why do different lenders offer different borrowing amounts?
Each lender uses its own affordability model and approach to risk. This means borrowing estimates can vary from one lender to another.
Does the size of my deposit matter?
A larger deposit reduces the level of borrowing required. This can affect affordability outcomes, The interest rate charged by the lender and the range of options available.
Final note
Understanding how lenders assess affordability can help you feel more informed when you start thinking about the next steps in your home buying journey. Knowing what lenders look at, and why these checks exist, can make the process feel more predictable and less overwhelming.
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