Mortgage Affordability: How Much Can You Really Borrow in 2025?
Complete guide to mortgage affordability in the UK. Learn how lenders calculate how much you can borrow, the 4.5x income rule, stress testing, and proven strategies to maximize your borrowing potential.
Understanding mortgage affordability helps you know how much you can borrow. Lenders typically offer 4-4.5x your income.
| Income | 4x Multiple | 4.5x Multiple |
|---|---|---|
| £30,000 | £120,000 | £135,000 |
| £50,000 | £200,000 | £225,000 |
| £75,000 | £300,000 | £337,500 |
Not Just Income
Frequently Asked Questions
How much can I borrow with a £40,000 salary?
With a £40,000 salary, most lenders will offer £160,000-£180,000 (4-4.5x income). However, your actual borrowing capacity depends on your debts, dependents, living costs, and credit score. Someone with no debts might get £180,000, while someone with £500/month in debt payments might only get £140,000.
What is the 4.5 times salary rule for mortgages?
The 4.5x salary rule means lenders typically offer up to 4.5 times your annual gross income. For example, £50,000 salary = £225,000 maximum mortgage. However, this is just a starting point - lenders also conduct detailed affordability assessments considering your debts, expenses, and ability to afford payments if rates rise.
How do lenders stress test mortgage affordability?
Lenders must stress test by calculating whether you could still afford the mortgage if interest rates increased by 3% (e.g., from 5% to 8%). If you couldn't afford the higher payment, they'll reduce the loan amount or decline your application. This protects both you and the lender from future payment difficulties.
Can I get a mortgage with debts?
Yes, but debts reduce your borrowing capacity. Lenders deduct your monthly debt payments from your disposable income when calculating affordability. Paying off £500/month in debts before applying could increase your borrowing capacity by £80,000-£100,000. Consider clearing debts before applying for a mortgage.
How much deposit do I need for a mortgage in 2025?
The minimum deposit is typically 5% (95% LTV), though 10-15% is more common and gives you access to better rates. A 20% deposit significantly improves your interest rate and monthly payment. For a £200,000 property: 5% = £10,000, 10% = £20,000, 20% = £40,000.