Mortgage affordability rules have evolved in recent years, and understanding how lenders assess your borrowing power is essential before applying for a mortgage.
Lenders typically use income multiples — often between 4x and 5x your annual income — but this is only the starting point. They also consider your monthly expenses, debts, credit score, and the stability of your income.
Higher interest rates can reduce the amount you can borrow, as lenders must ensure you can afford repayments even if rates rise. This is known as a stress test.
To estimate your monthly payments based on different loan amounts and interest rates, use the Mortgage Affordability Calculator to see how much you could borrow. It helps you understand what’s realistic before speaking to a lender.
If you're planning to borrow more or reduce your term, consider how overpayments could help. The Overpayment Calculator shows how extra payments can improve affordability over time.
Knowing your borrowing power puts you in a stronger position when searching for a property and negotiating with lenders.
