Home & property · 6 min read
Mortgage affordability: what sits behind the headline number?
An income multiple can be a rough planning shortcut, but it is not a mortgage decision. Lenders use their own affordability models and criteria, so the useful self-serve job is to understand the information that shapes the household picture.
Income is only one side
Salary, self-employed income, overtime, bonus, commission and other income can be treated differently depending on the lender and evidence. The first task is to record what income exists, how stable it is and how it is evidenced.
Commitments reduce flexibility
Loans, credit cards, car finance, childcare, maintenance and other regular commitments can affect how much room remains for a mortgage payment. Record the balance and monthly cost rather than only the type of debt.
Household circumstances matter
Dependants, planned retirement, property costs and other household factors can affect an affordability assessment. That is why two people on the same salary can receive different outcomes.
Stress-test your own budget too
Even if a lender would approve a payment, it still needs to fit your real life. Model the mortgage at more than one interest rate and compare the result with the monthly amount you would actually be comfortable paying.
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