The calculator above estimates how much you could borrow from your income, deposit and commitments. Lenders reach their own figure by a similar route, but they also look at things a calculator can't see. This guide covers both: a worked joint application, and the steps that make the biggest difference in the months before you apply.
A worked example: a joint application
Alex earns £40,000 and Sam £30,000. On a 4.5 times income multiple, their combined £70,000 supports borrowing of up to £315,000. Their take-home pay after tax and National Insurance is about £4,787 a month, and spending 35% of that on the mortgage gives a budget of about £1,675 a month. Tested at a 6% stress rate over 30 years, that budget supports a loan of about £279,000. Because that's lower than the income multiple, it's the figure that binds.
Now add a car finance payment of £300 a month, and a Plan 2 student loan for Sam. The housing budget falls, and the stressed borrowing figure drops to about £229,000, around £50,000 less. Clearing or reducing the car finance before applying would recover most of that, which is often a better use of savings than a slightly larger deposit.
What lenders look at beyond income
Your credit file shows how you've handled borrowing: missed payments, defaults, how much of your credit limits you use, and recent applications. Check your file with the main credit reference agencies a few months before applying, so you have time to correct any errors. Being on the electoral register at your current address helps lenders confirm your identity.
Lenders also look at your bank statements for regular commitments such as subscriptions, childcare and gambling transactions, and they ask about dependants. Self-employed applicants usually need two years of accounts or tax calculations, and bonuses or overtime may only count in part.
Steps that improve affordability
In rough order of impact: reduce or clear monthly debt payments, especially car finance and credit cards; increase the deposit enough to reach a lower loan-to-value band, often 90%, 85% or 75%, which can unlock better rates; consider a joint application if appropriate; and avoid new credit applications in the months before you apply. A Decision in Principle from a lender or broker gives you a realistic figure based on a soft or hard credit check, and makes your offers on properties more credible.
Fixing for longer can change the stress test
Lenders must check you could cope if rates rose, which is why the calculator tests your budget at a higher rate. Under FCA rules, lenders can assess some longer fixed-rate mortgages, typically those fixed for five years or more, at the actual pay rate rather than a stressed one, because your payment can't rise during that period. For applicants whose budget cap binds, a five-year fix can therefore support a larger loan than a two-year fix at a similar rate. It's worth asking a broker how different lenders treat the fixed period before choosing between them, but don't pick a longer fix for borrowing power alone if you might want to move or remortgage within it, because early repayment charges usually apply.
Timing your application
If a pay rise, probation period or new job is due soon, it can be worth waiting. Most lenders want employees to have passed probation, and a recent pay rise counts once it shows on payslips. Equally, avoid changing jobs between a mortgage offer and completion without telling your lender, because the offer is based on the income you declared.
The figures here are estimates, not a mortgage offer. Lenders' criteria differ, and a regulated mortgage adviser can tell you which lenders suit your situation.