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 |
|---|---|---|---|---|
| Dec 17 | £211,156 | £21,115 | £10,557 | click |
| Nov 17 | £209,988 | £20,998 | £10,499 | click |
| Oct 17 | £211,085 | £21,108 | £10,554 | click |
| Sep 17 | £210,116 | £21,011 | £10,505 | click |
| Aug 17 | £210,495 | £21,049 | £10,524 | click |
| Jul 17 | £211,671 | £21,167 | £10,583 | click |
| Jun 17 | £211,301 | £21,130 | £10,565 | click |
| 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 |
London
| Date | Price | 10% Deposit | 5% Deposit | Report |
|---|---|---|---|---|
| Q4 17 | £470,922 | £47,092 | £23,546 | click |
| Q3 17 | £471,761 | £47,176 | £23,588 | click |
| Q2 17 | £478,142 | £47,814 | £23,907 | click |
| 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 |
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 £185,531.00 at 4.75% you are looking at repayments of £1057.74 per calendar month for 25 years1.
This is 31.11% of the net monthly income in your household.
After each payment, you will be left with £2342.26 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 £41,229.11
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.
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.
Save for later
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Affordability Rating
With mortgage repayments taking up 31.11% 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 £1167.19 (34.33%.)
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 | £185,531.00 |
| Interest | £131,792.33 |
| Total Payable | £317,323.33 |
| 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 | £0.00 (0.00% of £206,145.00) |
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%) | £1111.79 (32.70%) | £2288.21 | Affordable |
| 5.75% (+1.00%) | £1167.19 (34.33%) | £2232.81 | Affordable |
| 6.25% (+1.50%) | £1223.89 (36.00%) | £2176.11 | Affordable |
| 6.75% (+2.00%) | £1281.86 (37.70%) | £2118.14 | Acceptable |
| 7.25% (+2.50%) | £1341.03 (39.44%) | £2058.97 | Acceptable |
| 7.75% (+3.00%) | £1401.37 (41.22%) | £1998.63 | Expensive |
| 8.25% (+3.50%) | £1462.82 (43.02%) | £1937.18 | Expensive |
| 8.75% (+4.00%) | £1525.33 (44.86%) | £1874.67 | Expensive |
| 9.25% (+4.50%) | £1588.85 (46.73%) | £1811.15 | Expensive |
| 9.75% (+5.00%) | £1653.34 (48.63%) | £1746.66 | Expensive |
| 10.25% (+5.50%) | £1718.73 (50.55%) | £1681.27 | Expensive |
| 10.75% (+6.00%) | £1784.98 (52.50%) | £1615.02 | Dangerous |
| 11.25% (+6.50%) | £1852.04 (54.47%) | £1547.96 | Dangerous |
| 11.75% (+7.00%) | £1919.87 (56.47%) | £1480.13 | Dangerous |
| 12.25% (+7.50%) | £1988.42 (58.48%) | £1411.58 | Dangerous |
| 12.75% (+8.00%) | £2057.64 (60.52%) | £1342.36 | Dangerous |
| 13.25% (+8.50%) | £2127.48 (62.57%) | £1272.52 | Dangerous |
| 13.75% (+9.00%) | £2197.92 (64.64%) | £1202.08 | Dangerous |
| 14.25% (+9.50%) | £2268.91 (66.73%) | £1131.09 | Dangerous |
| 14.75% (+10.00%) | £2340.41 (68.84%) | £1059.59 | Dangerous |
Save for later
If you want to return to this report at a later date, it is available via https://caniaffordtobuy.co.uk/SR-qmF9geYHeqMUoWbcdZgGdengOLyv.
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 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.
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 developer in London.
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 :)