Mortgage Repayment vs Affordability
Mortgage repayment vs affordability: these two concepts answer different questions about what you may borrow and what you may pay each month.
How Much You May Be Able to Borrow
Mortgage affordability is determined by your income, deposit, debts and outgoings. Lenders apply an income multiple — typically 4 to 4.5 times your annual salary — and then adjust for your actual financial commitments. The result is the maximum loan a lender may be willing to offer.
What Monthly Payments Could Be
Mortgage repayments depend on the loan amount, interest rate and term. A larger loan, higher rate or shorter term all increase monthly payments. The repayment calculator shows you the monthly cost of any loan amount at any rate and term, independently of what a lender might offer.
Using Both Calculators Together
The most useful approach is to use both calculators together. First, use the affordability calculator to estimate your maximum borrowing. Then use the repayment calculator to check that the monthly cost of that loan fits comfortably within your budget. If the monthly payment is too high, you can adjust the loan amount or term to find a payment you are comfortable with.
WizeBudget provides calculators and general information only. Results are estimates and do not constitute mortgage, financial or legal advice.