Breakdown
How it works
Lenders cap borrowing at a multiple of income (commonly 4.5×, up to 5.5× for high earners or professionals) and separately check that the payment, stressed at a higher rate, fits within your monthly budget after debts and living costs. You get the lower of the two.
Formula
Worked example
Income 45,000, debts 300 a month, 4.5× multiple → 186,300 by multiple. Take-home ≈ 2,700; 35% = 945 − 300 debts = 645 a month → 116,000 by affordability at 4.5% over 25 years. The affordability test binds.
Frequently asked questions
What income multiple do UK lenders use?
Typically 4.5× joint income. Some lenders offer 5–5.5× for incomes above £75,000 or certain professions, and 6× is rare. Regulators limit lenders to 15% of new loans above 4.5×.
What counts as income?
Basic salary in full; usually 50–100% of regular bonus, overtime and commission; self-employed average of 2 years' profits; some benefits and maintenance. Rental income from other properties counts partially.
What reduces how much I can borrow?
Credit cards, car finance, loans, childcare costs, student loan repayments and dependants. Clearing a 300-a-month car loan can add 15,000–25,000 of borrowing.
Why is the result lower than 4.5× my salary?
Because the monthly stress test at a higher rate (often actual rate + 1–3%) or your existing debts limit it. Extend the term or reduce debts to move toward the multiple cap.