The 4.5× figure comes from a financial stability rule: lenders may write no more than 15% of their new mortgages above 4.5 times income. It exists to stop the banking system taking on too much risk. It was never a statement about what an individual household can comfortably afford, and it is routinely read as one.
| Income | Borrowing | Payment | Of take-home | Stressed |
|---|---|---|---|---|
| £30,000 | £135,000 | £750/m | 36% | 48% |
| £50,000 | £225,000 | £1,251/m | 38% | 50% |
| £75,000 | £337,500 | £1,876/m | 42% | 55% |
| £100,000 | £450,000 | £2,501/m | 44% | 58% |
| £150,000 | £675,000 | £3,752/m | 49% | 66% |
The pattern nobody mentions
The share rises with income. At £30,000 the payment is 36% of take-home; at £150,000 it is 49%. That is the opposite of the usual intuition that higher earners have more room.
The reason is that the multiple is applied to gross income while the payment comes out of net. As income rises, a larger share of it is lost to tax, so the same multiple of gross is a larger multiple of what actually arrives. A £150,000 earner keeps a smaller proportion of their salary than a £30,000 earner, but is offered exactly 4.5 times the whole thing.
The stress test
Lenders do not test today's rate. They test one several points higher, so a remortgage in five years does not sink you. Apply the conventional three-point uplift and the payment reaches 66% of take-home at the top of the table. Lenders will usually decline before that point, which is why people are often offered less than the multiple implies and are surprised by it.
A more useful number
If you want the payment under a third of your take-home, you are looking at roughly 3.5× income rather than 4.5×. That is not a rule, and plenty of households live comfortably above it — but it is the multiple that corresponds to the comfort level people think 4.5× represents.
Work out your own on the affordability calculator, which shows the payment against your real take-home rather than your gross.