Have you ever asked yourself the question "Can I afford to buy a house" or "What mortgage can I afford"?

This calculator will help you determine whether buying a home with a mortgage is realistic taking into account your current finances.

Calculator

            House price index

            UK
            Date Price 10% Deposit 5% Deposit Report
            May 17 £208,711 £20,871 £10,435 click
            Apr 17 £207,699 £20,769 £10,384 click
            Mar 17 £207,308 £20,730 £10,365 click
            Feb 17 £205,846 £20,584 £10,292 click
            Jan 17 £205,240 £20,524 £10,262 click
            Dec 16 £205,898 £20,589 £10,294 click
            Nov 16 £204,947 £20,494 £10,247 click
            Oct 16 £205,904 £20,590 £10,295 click
            Sep 16 £206,015 £20,601 £10,300 click
            Aug 16 £206,145 £20,614 £10,307 click
            Jul 16 £205,715 £20,571 £10,285 click
            Jun 16 £204,968 £20,496 £10,248 click
            May 16 £204,368 £20,436 £10,218 click
            Apr 16 £202,436 £20,243 £10,121 click
            Mar 16 £200,251 £20,025 £10,012 click
            Feb 16 £196,930 £19,693 £9846 click
            Jan 16 £196,829 £19,682 £9841 click
            Dec 15 £196,999 £19,699 £9849 click
            Nov 15 £196,305 £19,630 £9815 click
            Oct 15 £196,807 £19,680 £9840 click
            Sep 15 £195,585 £19,558 £9779 click
            Aug 15 £195,279 £19,527 £9763 click
            Jul 15 £195,621 £19,562 £9781 click
            Jun 15 £195,055 £19,505 £9752 click
            May 15 £195,166 £19,516 £9758 click
            Apr 15 £193,048 £19,304 £9652 click
            Mar 15 £189,454 £18,945 £9472 click
            Feb 15 £187,964 £18,796 £9398 click
            Jan 15 £188,446 £18,844 £9422 click
            Dec 14 £188,559 £18,855 £9427 click
            Nov 14 £189,388 £18,938 £9469 click
            Oct 14 £189,333 £18,933 £9466 click
            Sep 14 £188,374 £18,837 £9418 click
            Aug 14 £189,306 £18,930 £9465 click
            Jul 14 £188,949 £18,894 £9447 click
            Jun 14 £188,903 £18,890 £9445 click
            May 14 £186,512 £18,651 £9325 click
            Apr 14 £183,577 £18,357 £9178 click
            Mar 14 £180,264 £18,026 £9013 click
            Feb 14 £177,846 £17,784 £8892 click
            Jan 14 £176,491 £17,649 £8824 click
            London
            Date Price 10% Deposit 5% Deposit Report
            Q1 17 £478,782 £47,878 £23,939 click
            Q4 16 £473,073 £47,307 £23,653 click
            Q3 16 £474,736 £47,473 £23,736 click
            Q2 16 £472,384 £47,238 £23,619 click
            Q1 16 £455,984 £45,598 £22,799 click
            Q4 15 £456,229 £45,622 £22,811 click
            Q3 15 £443,399 £44,339 £22,169 click
            Q2 15 £429,711 £42,971 £21,485 click
            Q1 15 £408,780 £40,878 £20,439 click
            Q4 14 £406,730 £40,673 £20,336 click
            Q3 14 £401,072 £40,107 £20,053 click
            Q2 14 £400,404 £40,040 £20,020 click
            Q1 14 £362,699 £36,269 £18,134 click

            This data is taken from the Nationwide House Price index and represents the average price of a house.

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            © 2017 Daniel Harper

            This calculator makes a number of assumptions and results should only be used as a guide.

            Affordability ratings should only be considered as an indicator of affordability and should not be considered as financial advice.

            Please speak to your lender or independent financial advisor for more substantial mortgage advice and eligibility.

            Summary

            With a mortgage of £184,453.00 at 4.75% you are looking at repayments of £1051.60 per calendar month for 25 years1.

            This is 30.93% of the net monthly income in your household.

            After each payment, you will be left with £2348.40 for other expenditure.

            Most lenders will only lend up to 4.5x the gross income of your household2. This means to qualify for the mortgage, you will need to have a gross annual income of at least £40,989.56

            With stricter lending rules that came into force 26th April 2014, lenders may also take into account your discretionary expenditure when deciding your eligibility for a mortgage3.

            As the price of the property is greater than £125,000, you will incur a tax of £1598.94, this is known as Stamp Duty4.

            1 This is assuming the interest rate on your mortgage stays fixed.
            2 Some lenders might only consider 4x or even 3x your gross annual income. Check with your lender to find out what their policy is.
            3 See http://www.theguardian.com/money/2014/apr/12/need-mortgage-new-rules-lenders-check for more information.
            4 See other costs for more information.

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            Affordability Rating

            Affordable

            With mortgage repayments taking up 30.93% of your monthly income, you should be able to afford other life expenditure and live quite comfortably. If the interest rate on your mortgage is variable, then it's worth looking at the things to consider panel to see how this might affect you.

            Even just a 1% raise would increase your monthly repayments to £1160.41 (34.13%.)

            About the ratings

            It's difficult to gauge what an appropriate percentage of your take home pay should be dedicated to servicing debts, as there isn't really that much of an official figure.

            However the general consensous appears to suggest that 36% or below is the most advisable1.

            This is how the ratings are determined2

            Rating % of income
            Affordable 36% or below
            Acceptable 40% or below
            Expensive 52% or below
            Dangerous greater than 52%

            1 http://hoa.org.uk/advice/guides-for-homeowners/i-am-buying/how-much-can-i-afford/
            2 These ratings are not to be taken as financial advice, they should just be used as a guide.

            Overview

            Mortgage £184,453.00
            Interest £131,026.57
            Total Payable £315,479.57
            Term 25 years
            LTV Ratio 90.00%

            Graphs

            Mortgage Details


            Loan to value (LTV)

            Household impact


            Repayment Schedule

            Other Costs

            Buying a house is expensive.

            Below you will find a rough guide to what you might come across when going through this process. Some expenses are easily quantifiable (e.g. Stamp Duty), but other are just estimates taken from sources such as this, so please treat this as a rough guide1.

            Cost Amount Description
            Stamp Duty £1598.94
            (0.78% of £204,947.00)
            A tax paid to the government when you buy a property in the UK over a certain price. For more information, see this guide.
            Solicitors Fees £500 - £750 + VAT This is to cover the legal work involved in purchasing a property, both buyers and sellers will require a solicitor to facilitate the transaction.
            Mortgage Booking Fee £0 - £250 Some lenders will charge you this to when applying for a mortgage, may be refundable should your application fail.
            Valuation Fee £150 - £1500 Most lenders will want to get the property valued to ensure it's worth the amount being applied for. On some deals this cost may be covered by the lender.
            Searches £250 - £300 Usually performed by your solicitor, this cost is to check with the local council any planning or local issues that may affect the property

            1 This is just a small selection of costs you may come across when going through the process. I heartily recommend this website https://www.moneyadviceservice.org.uk/en/articles/estimate-your-overall-buying-and-moving-costs to get a more detailed overview of the costs you will need to consider

            Things to consider

            If your lender rose rates to Monthly repayments would increase to Leaving you with Affordability rating
            5.25% (+0.50%) £1105.33 (32.51%) £2294.67 Affordable
            5.75% (+1.00%) £1160.41 (34.13%) £2239.59 Affordable
            6.25% (+1.50%) £1216.78 (35.79%) £2183.22 Affordable
            6.75% (+2.00%) £1274.41 (37.48%) £2125.59 Acceptable
            7.25% (+2.50%) £1333.24 (39.21%) £2066.76 Acceptable
            7.75% (+3.00%) £1393.23 (40.98%) £2006.77 Expensive
            8.25% (+3.50%) £1454.32 (42.77%) £1945.68 Expensive
            8.75% (+4.00%) £1516.47 (44.60%) £1883.53 Expensive
            9.25% (+4.50%) £1579.62 (46.46%) £1820.38 Expensive
            9.75% (+5.00%) £1643.73 (48.34%) £1756.27 Expensive
            10.25% (+5.50%) £1708.74 (50.26%) £1691.26 Expensive
            10.75% (+6.00%) £1774.61 (52.19%) £1625.39 Dangerous
            11.25% (+6.50%) £1841.28 (54.16%) £1558.72 Dangerous
            11.75% (+7.00%) £1908.72 (56.14%) £1491.28 Dangerous
            12.25% (+7.50%) £1976.86 (58.14%) £1423.14 Dangerous
            12.75% (+8.00%) £2045.68 (60.17%) £1354.32 Dangerous
            13.25% (+8.50%) £2115.12 (62.21%) £1284.88 Dangerous
            13.75% (+9.00%) £2185.15 (64.27%) £1214.85 Dangerous
            14.25% (+9.50%) £2255.73 (66.34%) £1144.27 Dangerous
            14.75% (+10.00%) £2326.81 (68.44%) £1073.19 Dangerous

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            If you want to return to this report at a later date, it is available via http://caniaffordtobuy.co.uk/SR-2iB. Please note, this link may become unavailable after 90 days.

            Click and copy the link below to add it to your clipboard.

            The purpose of this mortgage affordability calculator is to help people reason about their ability to afford a mortgage.

            While its primary aim is to help first time buyers on average incomes calculate whether they can afford to buy a property, it may also help those who: -

            • Are thinking about buying a home but are unsure of what a mortgage might cost and whether it is affordable.
            • Are considering the government led Help to Buy mortgage guarantee scheme and wondering whether you can afford a Help to Buy mortgage (especially for those with a 5% deposit)
            • Are already on the housing ladder and want to move to a new property.

            If you have any comments or suggestions about this site, feel free to tweet me @caniaffordtobuy

            Once you have inputted your information into the calculator, it will generate: -

            • A useful report that includes mortgage repayment details, percentage of income reserved for servicing debts and other costs you may need to consider, including Stamp Duty.
            • A set of graphs that provide an overview of the mortgage in a more visual manner
            • A handy guide on what might happen if interest rates rise on your mortgage
            • A unique URL that you can bookmark and return to later, or share with someone else.

            I'm coming to that time in my life where I'm beginning to think about buying a house. The single most frustrating thing to me has been trying to wrap my head around the myriad of topics you need to learn about mortgages and how they work. So I embarked on writing this mortgage calculator to help me see whether buying could be a viable option considering my financial situation.

            It is worth noting that there are plenty of similar mortgage calculators out there on the web that perform the same function, e.g.

            However I felt these were lacking some critical information such as interest rate rises or not taking into account your take home pay.

            As an excuse to start learning Android development, a version of this calculator is now available on Android devices.

            You can download Can i afford to buy? for free from the Google Play store.

            You can reach me via my twitter account @caniaffordtobuy

            Sure, but sharing spreadsheets isn't as fun as writing a website.

            My name is Daniel Harper, I work as software developer in London.

            For enquiries of a professional nature, you can try contacting me on LinkedIn, however I cannot guarantee a reply.

            • glyphicons.com for the excellent icon set.
            • Subrat Nayak (ipapun) for the home icon design, part of the "Devine-Icons Part 2" works available at this location. I have modified the colour of the works to suit the purposes of my design. This is licensed under the Creative Commons Attribution by license.

            Not in London, where I live.