How much you can borrow: the affordability rules that decide your loan

The question 'how much can I borrow?' has a different answer for every lender, because each uses a different income calculation and a different stress test. The headline income multiple of 4.5x is a starting point, not a finish line.

Here is what a lender actually does when they calculate your borrowing ceiling.

The income figure they use

For a PAYE employee, most lenders use gross basic salary plus guaranteed overtime, commission and bonuses averaged over the last two years. Variable bonus is often discounted by 20% to 50% for risk. For a self-employed borrower, it is usually the average of the last two years' net profit, but several lenders use one year, and some use salary plus dividends plus retained profit for limited company directors.

We see the same person get £220,000 from one lender and £310,000 from another, purely because of the income figure used.

The multiplier

The 4.5x figure is the most common, but some lenders go to 5x or 5.5x for higher earners, and a handful offer 5.5x to 6x for professionals (solicitors, doctors, accountants, actuaries) on tighter criteria. The multiplier is higher with a bigger deposit and a cleaner credit file.

The stress test that caps it

The multiplier gives a gross figure, but the lender then stress-tests it. They check whether you can afford the mortgage at the reverted rate (typically your pay rate plus 1%, or a floor around 8% to 9%), after deducting your committed expenditure (existing loans, credit card minimums, child care, maintenance). If the stress payment exceeds your disposable income, the loan is capped, even if the pay rate is affordable.

What drags the ceiling down

A £300 car finance payment can cut your borrowing by £40,000 because it is deducted before the stress calculation. Clearing a small loan or a credit card before you apply can lift the ceiling more than a pay rise.

What we do

We model your income and expenditure against each lender's specific calculation before you apply, show you the ceiling from three or four lenders side by side, and tell you which small change (clearing a card, adjusting a salary structure) would lift it most. No scattergun applications, no unnecessary hard searches.