Can I Afford This House? Sanity Check

Run a UK house purchase through the 50/30/20 rule and stress test the mortgage against ±10pp interest rate moves. Set against 100 years of Bank of England base rate history so you can see how common today's rate actually is.

Your numbers

House price

Deposit

LTV: 90.0%

Interest rate (current quote)

The headline fixed-rate quote. The stress test below shows what happens if rates move ±10 percentage points.

Term

years

Annual household gross income

Combined gross salary for the household. Used to estimate take-home pay and the share of net income the mortgage will consume.

Tax region

What happens to my data?

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Mortgage size

£270,000

£30,000 deposit

Monthly payment

£1,501

39.7% of net income (Risky)

Recommended buffer

£673/mo

Extra cushion to survive a +4pp rate shock when your fix ends

Against the 50/30/20 budgeting rule

The 50/30/20 rule allocates 50% of net pay to needs (housing, bills, food, transport), 30% to wants, 20% to savings. Housing alone should not consume the whole needs bucket - standard UK guidance is below 28% comfortable, 28-35% stretched, above 35% risky.

Mortgage

£1,501/mo

28% line

£1,058/mo

35% line

£1,323/mo

50% needs

£1,890/mo

Risky: Mortgage exceeds 35% of net income at the entered rate. Either increase the deposit, lower the price, or genuinely re-examine whether this purchase is sustainable.

Stress test: interest rate moves ±10pp

Your initial fixed-rate term ends in 2-5 years. After that, the variable rate you revert to could be materially higher or lower than today's quote.

Rate	Monthly	% of net	Band
-10pp (0.00%)	£900	23.8%	Comfortable
-8pp (0.00%)	£900	23.8%	Comfortable
-6pp (0.00%)	£900	23.8%	Comfortable
-4pp (0.50%)	£958	25.3%	Comfortable
-2pp (2.50%)	£1,211	32.0%	Stretched
Entered (4.50%)	£1,501	39.7%	Risky
+2pp (6.50%)	£1,823	48.2%	Risky
+4pp (8.50%)	£2,174	57.5%	Risky
+6pp (10.50%)	£2,549	67.4%	Risky
+8pp (12.50%)	£2,944	77.9%	Risky
+10pp (14.50%)	£3,354	88.7%	Risky

Bank of England base rate, last 100 years

UK mortgage rates have historically tracked the Bank Rate (with a few percentage points on top). The 1970s-80s peaks reached 17%; the 2009-2021 floor sat near zero. Source: Bank of England.

How often UK base rates have been at each level

Years out of the 101-year sample (1925-2025).

Rate band	Years	% of time
Under 2%	13	12.9%
2-4%	26	25.7%
4-6%	25	24.8%
6-8%	16	15.8%
8-10%	6	5.9%
10-15%	13	12.9%
15% or higher	2	2.0%

Build a buffer before you stretch on price

Your fixed-rate term ends in 2-5 years. The variable rate you revert to is set when the fix ends, not now.
Over the last 100 years, UK base rates have been above 6% for 37% of the sample and above 10% for 15%. The 2009-2021 near-zero floor was an outlier, not the norm.
Aim for a 3-6 month emergency fund before completion, plus a separate sinking fund that covers the £673/month difference between today's payment and a +4pp shock. Six months at that buffer is roughly £4,040 set aside.
The cheapest place to absorb a rate rise is a lower house price today, not a bigger salary in two years.

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The two affordability questions most buyers confuse

There are two completely different questions hiding inside "what can I afford?", and most UK homebuyer misery comes from answering one when you should have answered the other.

What will a lender give you? A number set by income multiples and a stress test, optimised to keep mortgage volumes flowing.
What can you actually afford to repay? A number set by your net take-home pay, your bills, and how much risk you want to carry into your 40s and 50s.

These two answers typically differ by 20-30%. The lender's number is almost always higher. Buying at the lender's ceiling is the single most common path to becoming mortgage-poor, and it is the framing the high-street banks would rather you used.

What a UK lender will actually give you

The headline rule of thumb is 4.5x household income. A couple earning £60,000 between them can borrow roughly £270,000. Some lenders will stretch to 5.5x for higher earners (typically over £75,000) or for professionals such as doctors and solicitors. Joint applications combine both incomes, which is one reason two median salaries can outbid a single high earner in the same postcode.

Lenders also run an affordability stress test, checking whether you could still pay the mortgage if rates jumped to roughly the lender's standard variable rate plus 3 percentage points. That test is the reason a 4.5x multiple isn't always offered in practice: high credit card balances, car finance, childcare costs, and student loan repayments all eat into the affordability number before the multiple ever gets applied.

What you can actually afford to repay

The honest version of the affordability question is built on net, not gross, income. Standard UK guidance, and the principle the calculator above uses, runs like this:

Below 28% of net income: comfortable. You can absorb a rate rise, a boiler replacement, or one partner taking time off work.
28% to 35% of net: stretched. Workable in good years, painful in bad ones. Limited room for pension contributions or holidays.
Above 40% of net: mortgage-poor. Any income wobble or unexpected bill becomes a crisis. Retirement saving usually collapses to nothing.

Use the take-home pay calculator to work out your actual net before benchmarking against these bands. Gross income is marketing; net income is what pays the mortgage.

The total cost of buying, not just the deposit

Most buyers budget for the deposit and treat everything else as a surprise. Budget 3-5% of the property price for non-deposit costs and the move stops feeling like an ambush.

Stamp Duty Land Tax: zero up to £125,000, then 2/5/10/12% bands. First-time buyers pay nothing up to £300,000 and 5% on the slice to £500,000 (no relief above that). Run the numbers in the stamp duty calculator.
Legal fees: £1,200 to £2,500 including searches and Land Registry fees.
Survey: £400 for a basic Level 2 (HomeBuyer), up to £1,500 for a full Level 3 building survey on an older property.
Mortgage product fee: £0 to £999, often £995. Worth comparing the true cost of a fee-free deal at a slightly higher rate against a low-rate deal with a big fee.
Removals and immediate costs: £500 to £2,000 for the move plus curtains, white goods, and the first round of repairs the survey didn't catch.

The LTV cliff: why the next 5% deposit is the cheapest money you'll ever save

UK mortgage rates step down in bands at 95%, 90%, 85%, 75% and 60% loan-to-value (LTV). Each step up the deposit ladder typically knocks 0.2 to 0.5 percentage points off the rate you'll be offered.

On a £300,000 mortgage, the difference between a 90% LTV deal at 5% and an 85% LTV deal at 4.6% is roughly £70 a month, or about £8,400 over a 10-year horizon. Saving an extra £15,000 of deposit to drop one LTV band routinely pays for itself several times over across the life of the mortgage. If you are within a few thousand pounds of the next band down, wait.

Help-to-Buy schemes, the LISA, and shared ownership

The Help to Buy ISA closed to new accounts in 2019. The Lifetime ISA (LISA) replaced it for most first-time buyers and adds a 25% government top-up on contributions up to £4,000 a year, but with a hard £450,000 property price cap. Above that cap the bonus is clawed back with a 25% withdrawal penalty, which makes the LISA painful in London and parts of the South East where £450,000 buys a one-bed flat. Our stocks and shares LISA comparison walks through which providers actually let you invest the money rather than just hold cash.

Shared ownership is the realistic route to a home in expensive areas for buyers who would otherwise be priced out for a decade. It is not a perfect product (service charges, restricted resale, staircasing costs) but it lets you start building equity earlier than a 100% mortgage on the same property would allow.

The price-to-income story nobody wants to say out loud

UK house prices have decoupled from local wages across most of the country over the last 20 years. The official price-to-income affordability ratio has gone from roughly 4x in 2000 to around 8x today nationally, and 13-15x in London. The lender's 4.5x income multiple is itself part of that story: it has crept up over decades to keep transaction volumes high while real wages stagnated.

Just because a lender will give you 5x your salary does not mean borrowing at that ratio is responsible. The retirement-saving impact of being mortgage-stretched through your 30s and 40s is real, measurable, and almost always invisible to the buyer at the point of purchase. Workers who buy at the top of the lender's affordability band consistently report years of paused pension contributions, no holidays, and zero emergency fund. That is not freedom; that is a 25-year obligation to the bank.

The worker-protective framing of this calculator is simple. Buy enough house, not the maximum house. The difference funds your pension, your sanity, and your bargaining power at work.

Worked example: lender ceiling vs sustainable budget

A couple earning £60,000 between them

Lender multiplier: 4.5x = £270,000 mortgage offer
With £30,000 deposit, that's a £300,000 property budget
Stress test at 7% (current rate plus 3 percentage points), 25-year term: £1,915/month
Net household income at £60k joint is roughly £45,000, or £3,750/month
£1,915 is 51% of net income: well into "risky" territory
The lender will sign off this purchase. A sober look at the numbers says either reduce the target price to around £230,000, or wait until incomes grow or the deposit doubles.

Run your own numbers in the calculator above and in the mortgage calculator to see the monthly payment under different rate and term assumptions.

Frequently asked questions

How much can I borrow for a UK mortgage?

Most UK lenders cap mortgage borrowing at around 4.5 times your annual household income. Some lenders will stretch to 5.5x for higher earners (typically over £75,000) or for certain professions. Joint applications combine both incomes. The headline multiple is then reduced by any credit commitments, childcare costs, and a stress test that checks you could still pay if rates rose to roughly the lender's standard variable rate plus 3 percentage points.

What percentage of my income should go on a mortgage?

Aim to keep your mortgage payment below 28% of your net (take-home) monthly income for a comfortable budget. Between 28% and 35% is workable but stretched. Above 40% of net income, the household becomes mortgage-poor: pension contributions usually stop, emergency funds run dry, and any income wobble or boiler repair becomes a crisis. Use net income, not gross, when running the numbers.

What extra costs do I need to budget for when buying a house?

Budget 3-5% of the property price for non-deposit costs. That covers Stamp Duty Land Tax (zero to 12% depending on price and whether you are a first-time buyer), legal fees of £1,200 to £2,500, a survey at £400 to £1,500, a possible mortgage product fee of up to £999, and £500 to £2,000 for removals plus immediate purchases. The deposit alone is rarely the full upfront bill.

How much deposit do I need to buy a house in the UK?

The minimum deposit on most mortgages is 5% (95% LTV), but rates step down sharply at 90%, 85%, 75% and 60% LTV. Each step typically knocks 0.2 to 0.5 percentage points off the rate. On a £300,000 mortgage, dropping from 90% to 85% LTV can save roughly £70 a month, or £8,400 over a 10-year horizon. If you are within a few thousand pounds of the next LTV band, the cheapest place to save money is a bigger deposit, not a longer term.

What is the LISA property price limit?

The Lifetime ISA can only be used to buy a property worth up to £450,000 for first-time buyers. Withdrawing LISA funds for a property above that cap triggers a 25% withdrawal penalty, which wipes out the 25% government bonus and takes a small slice of your own contribution on top. The £450,000 cap has not moved since 2017 and bites hardest in London and parts of the South East.

Should I borrow the maximum amount a lender offers?

Almost never. The lender's affordability assessment is designed around their risk and their volume targets, not your retirement plan. Buying at the top of the lender's range routinely leaves households with no pension contributions, no holidays, and no emergency fund for years. A sustainable mortgage payment is 25-35% of net income; the lender will happily approve a payment closer to 50%. The gap between those two numbers is the difference between owning a house and being owned by one.

What is shared ownership and is it worth it?

Shared ownership lets you buy 25% to 75% of a property and pay rent on the remainder to a housing association. For buyers priced out of full ownership in expensive areas, it is often the only realistic route to building any housing equity. The downsides are real: a service charge, restricted resale, and staircasing costs when you buy further shares. It is rarely the cheapest option in the long run, but it can be the only one that gets you onto the ladder this decade rather than next.