A couple calculate what they can borrow using a multiple of their combined income. The figure is comfortable and they start viewing properties at that level.
A lender assesses them and reaches a figure meaningfully lower. Car finance, a credit card balance, childcare and a personal loan all count against the calculation, and none of them was in the couple's arithmetic.
They have spent two months looking at houses they cannot buy, and they now have to start again in a lower bracket with considerably less enthusiasm.
The starting point: income multiples are a ceiling
Many lenders apply a maximum multiple and then assess affordability underneath it. The multiple tells somebody what is impossible rather than what is available.
What counts as income varies
Basic salary, overtime, bonus, commission, second jobs, benefits and self employed profit are all treated differently, and two lenders can value the same income very differently.
The self employed position is its own question
How many years, which figures, and whether profit or drawings are used, which is the ground in self employed buyers and the documents they need.
Existing commitments reduce it substantially
Car finance, loans, credit card balances and anything with a monthly payment. Each one reduces the borrowing figure by considerably more than the monthly payment suggests.
Childcare and dependants are counted
Both reduce the assessed capacity and both are routinely omitted from a buyer's own calculation, which is a large part of why the figures diverge.
Regular outgoings are assessed
Lenders apply their own assumptions about living costs, sometimes alongside what the statements actually show, which means spending patterns matter.
The deposit changes what is available
A larger deposit opens a wider range of products and sometimes a more generous assessment, which is worth understanding before assuming a figure.
The term affects the monthly figure
A longer term reduces the monthly payment and therefore improves affordability, at a considerably higher total cost, and the trade off should be made knowingly.
Interest rate stress testing applies
Lenders assess whether a borrower could still afford payments at a higher rate, which is why the figure is lower than a calculation based on the current rate.
Lenders differ enormously
The same couple can receive substantially different figures from different lenders, which is the single strongest argument for advice rather than an application.
Joint applications are not simply additive
How two incomes are combined and assessed varies, and an assumption that two salaries add up cleanly is frequently wrong.
Paying down a commitment can help more than saving
Clearing a small loan sometimes increases borrowing capacity by more than the same money added to a deposit, and almost nobody realises this.
An online calculator is a rough guide
Useful for a range and not for a decision, which is why the number should be checked properly before anybody views a property.
Give an honest range at the first contact
An assistant that asks about income type, existing commitments, dependants and deposit can give a realistic range and explain what would change it, which prevents two months of viewing the wrong houses. The same difficulty of giving a figure before assessment appears in claim value questions and why nobody can say and ai receptionist pricing questions, and the next stage in agreement in principle questions buyers misunderstand. See pricing, run the numbers on the chatbot ROI calculator, and the sector view sits under mortgage brokers.