Tax year 2026/27 · 4.5x loan-to-income ceiling

How much house can you actually afford

Lenders measure the payment against your gross salary. You pay it out of your take-home. This works out both, using the same tax engine as the take-home calculator, so the percentage you see is the one that will actually land on your bank statement.

£
£
£
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Car finance, loans, card minimums. Not rent or bills.

% — use the rate you've been quoted.

years

£242,500
the most you could buy
borrowing£202,500 84% LTV
Month to month
Monthly payment£1,126
Your take-home pay£2,993
the payment is this much of it38%
If rates rose 3 points£1,496
which would be50% of take-home
Limited by
Your income
4.5x household income is the ceiling here.
Verdict
Tight
Affordable now, but a rate rise would stretch you. Lenders will notice this too.

The multiple is a ceiling, not a target

Regulators cap lending at 4.5 times income for all but 15% of a lender's new mortgages, so most people are quoted a maximum of 4.5x and treat it as the budget. Run the numbers at that maximum and the monthly payment comes to roughly 35 to 43% of take-home pay — at every income from £25,000 to £150,000. Push it through the stress test and it clears half.

That is not a coincidence, it is what the ceiling means: it is the point at which lending stops, not the point at which it is comfortable. If you want the payment under a third of your net pay, you are looking at roughly 3.5x, not 4.5x.

Why two salaries beat one

Two people earning £30,000 each and one person earning £60,000 will be offered the same mortgage — the multiple is applied to gross household income either way. But the couple takes home more, because they get two personal allowances and two goes at the basic-rate band. Same loan, more money to pay it with.

The stress test

Lenders do not check whether you can afford today's rate. They check a rate several points higher, so that a remortgage in five years does not sink you. This page uses 3 percentage points above whatever rate you enter, which is the conventional margin. If the stressed figure is over 40% of your take-home, expect a lender to offer you less than the multiple suggests.

What the deposit really buys

A deposit does two things. It caps how much you can borrow at 95% of the price, and it decides which rate tier you land in. Lenders price in bands — 95%, 90%, 85%, 75%, 60% — and the gap between them is real money over 25 years. Getting from a 90% to an 85% deposit is often worth more than a pay rise.