I have created a new calculator for mortgage affordability.  It's a simple one; I will probably expand it in time.  For now, it's for those applying for a mortgage, with no other properties.  Just a simple view of whether someone would meet affordability based on a few simple inputs.  

It could use some refining, but the issue is that the more fields, the longer it takes to complete, the less keen people are.  So, for now, I will monitor whether anyone uses it and make some other changes I have thought of in the coming weeks.

Some Caveats

Aside from it being simple, you must be aware that there are many lenders out there.  They all have their own approach to affordability.  One will treat income in a different way to others.  Some will accept types of income that others won't, and so on.  Some examples;

• Some allow 100% of bonuses and commission, while other lenders may only allow 50% of the bonus or 75% of the commission.
• Some lenders allow certain benefits to be included in income; others won't.
• Some lenders apply a higher stress rate than others; some won't use a stress rate at all anymore.
• Loan to Income varies; many lenders have a base of 4.5 times gross income, but some will adjust that based on other elements.

Due to this, you cannot assume that if my calculator says it's affordable, it will be to the lender you go with.

What I am doing 

So it's clear what approach I am taking.

• All income is allowed at 100%.
• Mortgage rate set at an average of the current rates of 4.5%.
• To see the difference in stress rates, I have displayed a 1%, 2% and 3% stress rate.
• I consider a Loan to Income limit of 4.5 or lower acceptable, but display the actual value for reference.

Unfortunately, there are too many lenders, too many different approaches; therefore, it's important to take a broader view.

If you have any suggestions, get in touch.