How much mortgage can I really afford in 2026?
Working out a realistic mortgage budget is one of the trickiest parts of buying your first home. Lenders will quote you an "affordability multiple" (typically 4 to 4.5 times your annual income), but that's only half the story. The number you can actually live with depends on the interest rate, the term, and what's left over after the rest of your monthly outgoings.
The lender's view: income multiples
Most UK lenders cap loans at around 4.5× a single income or joint income. If you and a partner together earn £80,000, that puts a ceiling somewhere around £360,000. Some lenders go to 5× or even 5.5× for higher earners, but those products are tighter on credit history and deposit size.
Income multiples are a blunt tool. They ignore your debts, your childcare costs, and the fact that the same £360,000 loan looks very different at 4% versus 6%.
The 30% rule
A more useful guideline: your total housing costs (mortgage payment, council tax, buildings insurance, ground rent if any) shouldn't exceed 30% of your net monthly income. Push past 35% and life starts to feel tight: holidays get cancelled, savings stall, and one boiler breakdown can wipe out the month.
Stress test at +2%
Lenders run their own stress tests, but you should run your own too. Take whatever rate you're being quoted today, add 2 percentage points, and recalculate the monthly payment. If the higher number still fits comfortably inside your budget, you've got headroom. If it doesn't, you're borrowing too much for the next time rates move against you.
The reserve fund
Beyond the deposit, you want at least three months of mortgage payments held in cash before you exchange. Boilers fail. Roofs leak. Babies don't always arrive on schedule. The deposit empties your reserves; the reserve fund is what keeps you afloat in month one.
Run the numbers
Mortgage Calculator
See your monthly payment, total interest, and how each variable shifts the figure. Adjust rate by ±2% and watch the stress test in real time.
Open the calculator →Common mistakes
Borrowing the maximum on day one. Lenders will offer the largest figure they're allowed to. That's not the same as the figure you should accept.
Forgetting non-mortgage costs. Stamp duty, surveys, solicitor fees, removals. Budget 3-5% of purchase price on top of the deposit.
Picking the longest term to make payments fit. A 35-year mortgage looks affordable monthly but adds tens of thousands in interest over the life of the loan. Stretch the term only if the alternative is genuinely unaffordable.