How much can I borrow for a mortgage?

Understand your borrowing power 

Before you fall in love with a property it helps to know what you can afford. That starts with understanding how much a mortgage lender might offer you. Knowing your borrowing power helps you:

• Set a realistic savings goal for your deposit.
• Understand your potential price range.
• Search smartly; viewing homes within your budget.

Quick tip: The amount you can borrow + your deposit = your estimated price range.

What affects how much you can borrow? 

Mortgage lenders look at a few things to decide how much they're willing to lend you. Things like:

• Your income. Or your combined income if you're buying with someone else
   
• Your regular outgoings. Things like childcare costs, credit card payments, or loan repayments.
   
• The size of your deposit. The bigger your deposit, the lower your loan to value (LTV). And the better your chances of accessing a more competitive rate from your lender.
   
• Your credit score. Maintaining a healthy credit score can reassure lenders that you're financially responsible.

Working out what you can afford

You dont' need a fancy mortgage calculator to get an idea of your price range. Just ask yourself:

• How much can I save for a deposit?
• What monthly repayments would I feel comfortable with?
• What mortgage deals are available to me?

Our mortgage finder can help you see which deals you might be able to apply for with Principality. Just enter the property value and your deposit amount to browse our residential mortgages.

Working out what you can afford: an example

Max and Jaime are first time buyers earning £28,000 and £30,000 a year.

They don't have any major debts.

• Based on their joint income of £58,000, they might be able to borrow around £250,000.
• With a £15,000 deposit, they could look at homes worth around £265,000.

This is just an estimate. A Decision in Principle (DIP) could give you a clearer idea of what you could borrow based on your financial situation.