Getting rejected for a mortgage because of affordability is a nightmare for many people, but it doesn't have to be the end of your home-buying journey. Different lenders have different affordability requirements and a good mortgage broker will be able to help you find a lender with criteria that aligns with your circumstances.

A mortgage can be declined on affordability problems at almost any stage of the application process. Fortunately, if you receive a rejection, there are steps you can take to increase your chance of getting a mortgage somewhere else. In this guide, we'll go over why mortgage applications get declined on affordability, what you can do to avoid this and how to find a lender with mortgage affordability criteria that suits your situation.

What Is Affordability?

Affordability is a term that lenders use to essentially describe how much you can afford to borrow on your mortgage. Lenders will work out your affordability by calculating your maximum potential borrowing and assessing what you can afford to pay back on a monthly basis.

The lender will determine your maximum borrowing by looking at your annual income. They will then consider your monthly income and outgoings, deposit, age and more in order to assess your risk as a borrower and work out what you can afford to pay back each month in mortgage repayments and interest payments.

You can use our mortgage borrowing calculator to estimate your maximum borrowing and our mortgage repayment calculator to get an idea of your monthly mortgage payments.

Why Do Lenders Look at Affordability?

Lenders look at affordability to minimise the risk they take on when offering a mortgage. If someone defaults on paying their mortgage, then the bank or lender is at risk of losing revenue. Even if the lender repossesses the property and sells it, they could lose money. At the very least, the lender will have to go through the added effort and expense of trying to reclaim their money by finding a new buyer.

This means that lenders can be quite strict with affordability criteria. They want to ensure that you’ll be able to pay back your mortgage loan even if unexpected costs come up, such as house repairs, loss of income, or other problems.

Unfortunately for borrowers, affordability checks have been getting stricter for many lenders or they have specific borrowing situations in mind. "Stress testing" of a borrower's income and affordability is also designed to protect them against issues such as rising interest rates which increase the risk of people defaulting on their loans.

How Do Lenders Calculate Affordability?

Every lender will calculate affordability in a different way to work out how much you can borrow. Most of the time, this will involve looking at a multiple of your income. Most lenders will offer 4 – 4.5x your income as the maximum you can borrow. Some lenders may be able to offer maximum borrowings at 5 or even 6 times your income in certain special circumstances. If there is more than one person applying for the mortgage, the multiple will factor in the combined incomes of all applicants. You’ll have to show proof of your income for it to be considered in affordability calculations.

Once the lender has worked out your maximum borrowing, they’ll consider your regular outgoings and any ongoing expenses you have. This can include items such as loans, credit card payments, child maintenance costs, car financing, personal goods or furniture financing and more. All of these will have to be considered to make sure that your income can cover a mortgage on top of any other regular monthly payments you have to make. The lender will use this information, along with other factors relating to your application – e.g. your LTV (loan-to-value), age, etc. – to determine what you can afford in monthly payments, your mortgage term and rate.

Ultimately, if you don’t meet the lenders affordability criteria, then they won’t be able to offer you that mortgage. They may be able to offer you a smaller loan amount or a different product, or they may reject your application altogether.

Using a mortgage broker like John Charcol is the easiest way to ensure you apply for a product where you meet the lender’s affordability criteria. This can help you secure a mortgage and save you time, getting you into your property sooner.

Problems that Can Affect Affordability

If you’re rejected for a mortgage because of affordability, you might not be told what the exact problem is, especially if you don’t use a mortgage broker who can explain it to you. There are various factors that can cause an affordability issue. Here are some of the most common issues.

Low Income

As we've mentioned, lenders will look at your income and use a multiple of this to see how much they’ll consider lending to you. If your income is too low, you may not be able to borrow as much as you need or first thought.

Most lenders will offer around 4.5x your income as a maximum borrowing amount. This means that if your salary is £40,000, you could get a mortgage of up to £180,000. This would be suitable if you had £20,000 in deposit and wanted a property valued at £200,000. However, if the property you wanted was more expensive, you would have to have to make up the difference in deposit as you probably would be unable to borrow more than £180,000.

Income from Benefits

If you get some or all of your income from benefits, this could be a problem with certain lenders. Not all lenders will consider all types of benefits when assessing affordability. There are lenders that will let you include a portion of income from benefits for affordability – e.g. child benefits - but these are rarer and harder to find. A mortgage broker like John Charcol will be able to direct you towards a lender that can consider certain benefits to help maximise your borrowing power.

Bonuses, Commissions and Overtime

It can be a challenge to find lenders that will let you count all bonuses, commissions, or overtime in affordability calculations. This can be a problem for people who get a significant part of their income from these sources. However, a broker will be able to find some lenders that will let you declare a percentage or the whole amount of bonuses, overtime, or commission funds on your application.

Rental Income

If your primary income is from letting, you might need to go through additional checks to show that this is sustainable. This is especially the case with holiday lets, where income could vary in different seasons.


As investment income can be less stable than employment income, you might have trouble getting this accepted by banks, as they’ll worry about the longevity and reliability of your income. You might have to consult a mortgage broker like John Charcol who can talk to private banks or specialist lenders to get your investments considered for affordability.


Pensions and retirement income are usually not counted for mortgage affordability, and you could struggle to get a mortgage term length that stretches far into your retirement years. Again, you can find lenders who are more willing to consider this when you need a house loan if you use a mortgage broker like John Charcol.

Too Many Debts or Other Outgoings

Lenders will usually look at outgoings alongside your income to see how they could affect your ability to pay your mortgage. If you have a high amount of debt compared to your income this will obviously reduce the amount of disposable income you have available, thereby affecting your affordability and the lenders available to you.

There are some lenders that will be willing to accept borrowers with higher debt-to-income ratios, and you might find that there are lenders that will take special circumstances into account as well. You’ll likely need a broker to use one of these specialist lenders.

What to Do if You Have a Mortgage Declined on Affordability

It can be very upsetting to have a mortgage application declined, especially if you feel you're able to make the repayments. However, this does not have to be the end of your hopes for buying your dream home. There are still ways of getting approved after mortgage rejection.

One of the key things to consider is that different mortgage lenders will calculate affordability using different criteria. This means that most of the time, people who have been rejected for a mortgage can get a mortgage offer by finding a different lender that suits them.

If you've been declined for a mortgage, there are steps you can take to improve your chances of getting approved the next time you apply:

  • Speak to a mortgage broker – a mortgage broker like John Charcol will be able to give you information on why your application was rejected. We’ll also be able to guide you on next steps, whether this includes reapplying with a new lender, waiting a while to reapply so you can improve your credit profile, applying for a smaller mortgage, or something else
  • Understand why your application was rejected – you may be able to ascertain this information directly from the lender but they don’t have to provide you with a lot of details. The easiest way to understand why your application was rejected is to use a mortgage broker as we’ll be able to explain everything to you since we know the lender’s criteria and can speak to them on your behalf. Once you know what issues you’re dealing with, you can be better prepared when it comes time to reapply
  • Make sure you know your financial situation - if you've been rejected for a mortgage because of affordability, you should make sure that you have all your financial information readily accessible. You should also obtain credit reports from the major credit reference agencies so you can review your situation and see where you can improve
  • Look at how to improve your affordability - there are steps you can take to improve your affordability which we cover later in this guide

What to Do if You Can't Remortgage Due to Affordability

If you find yourself a mortgage prisoner and unable to remortgage due to affordability issues, you might need to use a specialist broker to help you find a suitable lender. People may struggle to remortgage, even if they're up to date with their payments, because their income has decreased, other outgoings have increased, they’ve had some recent adverse credit events, the house value has depreciated and more.

How Can a Mortgage Broker Help with Affordability Issues?

If you've been declined by one or more lenders already, including high street lenders like HSBC, Barclays, or Lloyds, you’ll find talking to a broker extremely worthwhile. At John Charcol, we have the experience and expertise to help you find a lender with affordability criteria that aligns with your situation, giving you the best chance at a great deal.

We can find you a lender that:

  • May be able to offer you a higher income multiple
  • Can consider a longer mortgage terms
  • Has a higher age limit
  • Accepts more types of income for their affordability calculations
  • Accepts customers with high debt
  • Accepts higher risk customers or those with bad credit
  • And more

We know which lenders are more likely to accept your application because we know their criteria. We also have access to more lenders, as not all lenders deal with clients directly. This includes lenders with more lenient affordability calculations and flexible criteria.

How to Improve Your Affordability

If you're struggling to get approved and want to get a mortgage, there are some steps that you can take to improve your affordability.

  • Increase your income or find a lender that can consider more types of income
  • Reduce your debts
  • Reduce other regular outgoings
  • Consider a joint mortgage or joint borrower sole proprietor setups

Other Reasons You Could Be Declined

As well as affordability, there are other reasons that you could get declined during your mortgage application, including the following.

  • Credit issues - if you have a poor credit score or a bad credit history, this will limit the lenders and products available to you as many lenders will reject your application because you’re a high risk borrower. Alternatively, the lender may have more requirements to compensate for the additional risk of lending to you – e.g. they may cap your maximum borrowing at a lower amount. Bad credit events include late payments, missed payments, county court judgments, bankruptcy and more. A broker can help you find specialist lenders if you have a poor credit history
  • High-risk financial habits - if you're a gambler or have other high risk financial habits, you might find that this deters some lenders
  • Uncertain future of finances - if a lender believes that your financial situation could significantly change over the course of your mortgage, you could be declined
  • Too small a deposit - if lenders see something concerning in your application, they may want a higher deposit payment. A larger deposit will reduce your LTV, which also increases affordability
  • Property valuation issues - sometimes properties can be valued incorrectly, which can cause issues with a mortgage application. If the selling price is much higher than the value of the property, you might get rejected
  • Non-standard construction – if the property you’re after is of non-standard construction you’ll likely require a specialist lender with more flexible criteria

Mortgage Declined on Affordability: Summary

Getting declined for a mortgage can be an upsetting part of an already-stressful home-buying process, but it doesn't have to stop you. One of the main reasons that lenders decline people based on affordability is that they don't account for certain types of income, such as commissions, bonuses, or benefits. You might also have many outgoings that limit what you can afford in monthly payments.

If you're struggling to get a mortgage due to affordability, you can trust our brokers are here to help. At John Charcol, we have expert mortgage advisers who can help pair you with the right type of lender to help you secure a suitable mortgage. Get in touch today and call us on 0330 433 2927 to see how we can help you get a mortgage offer that suits your situation.

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