Enter your yearly income before tax and your deposit, and if you like an interest rate and a term. The calculator multiplies your income (by 4.5 unless you choose another multiple) to estimate what a lender might offer, adds your deposit, and finds the highest price you can pay once the purchase tax is paid: Stamp Duty Land Tax in England and Northern Ireland, Land and Buildings Transaction Tax in Scotland, or Land Transaction Tax in Wales.
Income and the multiple
Enter your gross yearly income, added to that of anyone buying with you. No law caps how much you may borrow: each lender checks affordability, looking at your income, debts and spending, so many offer less. The Bank of England treats a mortgage of 4.5 times income or more as high loan-to-income lending and limits it to 15% of new mortgages across the market, which is why 4.5 is used unless you enter another multiple.
Where you buy and what kind of buyer you are
Choose the nation, then whether you are a first-time buyer, replacing your main home, or buying an additional property. In England and Northern Ireland first-time buyers pay no SDLT up to £300,000 and 5% from there to £500,000; above £500,000 the relief is lost. In Scotland the relief raises the nil-rate band to £175,000. Wales has no first-time buyer relief. An additional home pays 5 points more on every SDLT band, the 8% Additional Dwelling Supplement in Scotland, or the higher LTT rates in Wales.
Reading the result
The highest price is the largest whole-pound price for which the price, the tax and your other costs fit within your deposit plus the mortgage. Add solicitor, survey and lender fees under Other costs. With an interest rate, you also get the monthly repayment. If your deposit does not cover the tax, the mortgage would be more than the price, and the calculator says so.
Most you could borrow = yearly income × multiple, rounded down to the pound.
Budget = deposit + most you could borrow.
Highest price = the largest price P for which P + tax(P) + other costs ≤ budget.
Tax(P) = each band's rate × the part of P in that band, added up; SDLT is rounded down to the pound, LBTT and LTT to the nearest penny.
Monthly repayment = mortgage × r ÷ (1 − (1 + r)^−n), with r = yearly rate ÷ 12 and n = months, rounded to the nearest penny.
Example: £60,000 income, buying in England
On £60,000 a year at 4.5 times income you could borrow £270,000. With a £29,750 deposit the budget is £299,750. Replacing your main home in England, the highest price is £295,000: its SDLT is £4,750, which is GOV.UK's own example (2% on £125,000 is £2,500, plus 5% on the final £45,000 is £2,250), and £295,000 + £4,750 is exactly the budget. The mortgage is £270,000, 91.53% of the price, and at 4.5% over 25 years the monthly repayment is £1,500.75. For a first-time buyer with £100,000 of income and a £60,000 deposit, the budget of £510,000 buys at £500,000 with £10,000 of SDLT, GOV.UK's first-time buyer example.
