Mortgage affordability rules explained
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Quick answer: UK lenders must assess affordability using income, outgoings and stress-tested interest rates — you typically need proof of earnings and a deposit of at least 5–10%.
FCA responsible lending rules require lenders to verify you can afford payments if rates rise. Affordability calculators give estimates but underwriters decide. This guide explains what counts.
Last reviewed:
Read the full mortgages & first homes guide →Primary source: www.gov.uk/buying-a-home/preparing-to-buy
What income counts
Basic salary plus guaranteed overtime or bonuses if history supports it. Commission and variable pay may be averaged over two years.
Rental income, maintenance and some benefits may count with evidence — rules differ by lender. Each lender uses its own multiples and criteria for what counts as income.
Expenditure assessment
Lenders use ONS household spending data or your bank statements for categories like groceries and utilities. Underwriters look for sustainable spending, not just income.
Existing credit commitments reduce capacity — pay down cards before applying if possible. High credit utilisation on cards can reduce the mortgage amount lenders offer.
Loan to value impact
Higher deposits unlock better rates and sometimes higher multiples. 95% LTV products exist but cost more and stress tests are stricter.
New-build Help to Buy legacy schemes closed — standard affordability applies to most first-time buyers now. Shared ownership and other schemes have separate affordability rules.
Common questions
Why was I declined despite high income?
High outgoings, recent credit issues or self-employed income volatility commonly cause declines despite salary.
Do guarantor mortgages help affordability?
Family members can support applications — their income or security expands borrowing but carries legal risks for guarantors.
Can I borrow more with a joint application?
Joint incomes combine but lenders still stress-test — not always double the single borrowing amount.