Can I afford to buy
Mortgage Affordability Calculator
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 |
|---|---|---|---|---|
| {{ entry[0] }} | £{{ chop(humanize(entry[1]), 3) }} | £{{ chop(humanize(percentOf(entry[1], 10)), 3) }} | £{{ chop(humanize(percentOf(entry[1], 5)), 3) }} | click |
London
| Date | Price | 10% Deposit | 5% Deposit | Report |
|---|---|---|---|---|
| {{ entry[0] }} | £{{ chop(humanize(entry[1]), 3) }} | £{{ chop(humanize(percentOf(entry[1], 10)), 3) }} | £{{ chop(humanize(percentOf(entry[1], 5)), 3) }} | click |
This data is taken from the Nationwide House Price index and represents the average price of a house.
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.
Report For illustrative purposes only
Summary
With a mortgage of £{{ humanize(md.mortgageAmount) }} at {{ req.interestRate.toFixed(2) }}% you are looking at repayments of £{{ humanize(md.monthlyRepayments) }} per calendar month for {{ req.term }} years1.
This is {{ ip.percentageConsumed.toFixed(2) }}% of the net monthly income in your household.
After each payment, you will be left with £{{ humanize(ip.amountRemaining) }} 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 £{{ humanize(md.likelyIncomeRequired) }}
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.
You will incur a Stamp Duty tax of £{{ humanize(md.stampDuty) }} as a first-time buyer (0% up to £300,000, 5% on £300,000–£500,000)4. , 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 https://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
With mortgage repayments taking up {{ ip.percentageConsumed.toFixed(2) }}% 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 £{{ humanize(plus1.mortgageDetails.monthlyRepayments) }} ({{ plus1.incomeProfile.percentageConsumed.toFixed(2) }}%.)
With mortgage repayments taking up {{ ip.percentageConsumed.toFixed(2) }}% of your monthly income, you should be able to afford other life expenditure within reason. However, 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 £{{ humanize(plus1.mortgageDetails.monthlyRepayments) }} ({{ plus1.incomeProfile.percentageConsumed.toFixed(2) }}%.)
With mortgage repayments taking up {{ ip.percentageConsumed.toFixed(2) }}% of your monthly income, you might want to consider and prioritise your remaining expenditure. 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 £{{ humanize(plus1.mortgageDetails.monthlyRepayments) }} ({{ plus1.incomeProfile.percentageConsumed.toFixed(2) }}%.)
Life expenditure
Remember that you will need money for: -
- Food
- Utilities (electricity, water, gas)
- Council tax
- Transportation costs
- Home and contents insurance
- Broadband internet
- Telephony
- Personal care
As well as taking into consideration: -
- Dependants
- Credit card debt (if any)
- Personal loans (if any)
With mortgage repayments taking up {{ ip.percentageConsumed.toFixed(2) }}% of your monthly income, you will be left with £{{ humanize(ip.amountRemaining) }} to cover other life expenditure.
You need to seriously consider whether you will be able to keep up with the repayments. Especially when the interest rate on your mortgage is variable, any hike in rates could leave you in a financially difficult position (check out the things to consider panel to see how this might affect you.)
Even just a 1% raise would increase your monthly repayments to £{{ humanize(plus1.mortgageDetails.monthlyRepayments) }} ({{ plus1.incomeProfile.percentageConsumed.toFixed(2) }}%.)
Life expenditure
Remember that you will need money for: -
- Food
- Utilities (electricity, water, gas)
- Council tax
- Transportation costs
- Home and contents insurance
- Broadband internet
- Telephony
- Personal care
As well as taking into consideration: -
- Dependants
- Credit card debt (if any)
- Personal loans (if any)
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 | £{{ humanize(md.mortgageAmount) }} |
| Interest | £{{ humanize(md.interestPayable) }} |
| Total Payable | £{{ humanize(md.totalPayable) }} |
| Term | {{ req.term }} years |
| LTV Ratio | {{ md.mortgagePercentage.toFixed(2) }}% |
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 |
£{{ humanize(md.stampDuty) }} ({{ humanize(md.stampDutyPercentage) }}% of £{{ humanize(req.housePrice) }}) |
No Stamp Duty payable. As a first-time buyer purchasing a property under £300,000, you benefit from full first-time buyer relief — the entire purchase price is exempt. For more information, see this guide. As a first-time buyer you receive reduced Stamp Duty — 0% on the first £300,000 and 5% on the portion up to £500,000. No first-time buyer relief applies above £500,000. For more information, see this guide. 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 / Conveyancing Fees | £1,000 - £2,500 + 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. Costs vary significantly depending on property price and complexity. |
| Mortgage Arrangement Fee | £0 - £2,000 | Many lenders charge an arrangement fee to set up the mortgage. This can sometimes be added to the mortgage itself, though you'll pay interest on it. May be refundable if your application is unsuccessful. |
| Valuation Fee | £0 - £1,500 | Most lenders will want to get the property valued to ensure it's worth the amount being applied for. Many lenders now offer this free as part of the mortgage deal, but it's worth checking. |
| Survey | £400 - £1,500 | A lender's valuation is not a survey. It's strongly advisable to commission your own — either a RICS Level 2 (HomeBuyer Report, ~£400–£1,000) or a more thorough Level 3 (full structural survey, ~£600–£1,500). Older or unusual properties warrant the more detailed survey. |
| Searches | £300 - £500 | Usually performed by your solicitor, these checks cover local authority planning records, water and drainage, and environmental issues that may affect the property. |
1 This is just a small selection of costs you may come across when going through the process. Figures are approximate and will vary by region, lender, and property. See MoneyHelper for 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 |
|---|---|---|---|
| {{ t.request.interestRate.toFixed(2) }}% (+{{ t.inc.toFixed(2) }}%) | £{{ humanize(t.mortgageDetails.monthlyRepayments) }} ({{ t.incomeProfile.percentageConsumed.toFixed(2) }}%) | £{{ humanize(t.incomeProfile.amountRemaining) }} | {{ t.incomeProfile.affordabilityRating }} |
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If you want to return to this report at a later date, it is available via {{ shareUrl }}.
Click and copy the link below to add it to your clipboard.
About
What is this?
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 already on the housing ladder and want to move to a new property.
Features
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.
Why?
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.Couldn't you have just done a spreadsheet?
Sure, but sharing spreadsheets isn't as fun as writing a website.
Who are you?
My name is Daniel Harper, I work as software engineer.
For enquiries of a professional nature, you can try contacting me via methods listed on my personal website, however I cannot guarantee a reply.
Acknowledgements
- 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.
Can you afford to buy?
Not in London, where I used to live.
But I've just recently completed on a house elsewhere in the UK :)