How Much Can I Borrow Calculator
The “How Much Can I Borrow Calculator” is a tool designed to help you estimate how much you might be able to borrow for a mortgage based on your income and any guaranteed bonuses. Here’s a simple guide on how to use it and what it does:
What Is the Calculator For?
This calculator helps you figure out the range of mortgage amounts you may be eligible for, based on your annual income (and that of a second applicant, if applicable). It breaks down your borrowing potential into three categories:
- Green: Amount you’re most likely to borrow.
- Amber: A middle range where borrowing is possible but might be more challenging.
- Red: An amount that is less likely to be approved.
The goal is to give you a clear idea of what size mortgage lenders might be comfortable with, helping you plan your home-buying budget.
How to Use the Calculator:
- Number of Applicants:
- Choose whether one or two people are applying for the mortgage. If two people are applying, the calculator will ask for both incomes.
- Enter Annual Income(s):
- Input your annual income in the designated field. If a second person is applying, you will also need to enter their annual income.
- Guaranteed Bonuses:
- If you receive any guaranteed bonuses from your job, enter that amount as well. This will be added to your total income for the calculation.
- Click “Calculate”:
- After filling in the required information, click the “Calculate How Much You Can Borrow” button to see your results.
Understanding the Results:
- Green Range: This shows the amount you are likely to be approved for, typically up to four times your total income.
- Amber Range: This range is possible, but it’s more cautious, and the amount stretches up to 4.5 times your income.
- Red Range: This is a higher range (up to 5 times your income), but it is less likely you’ll be approved for this much.
The calculator also shows a simple visual chart with green, amber, and red bars to give you a quick overview of your borrowing capacity. The green bar is the safest range, while the red bar represents a higher risk of being turned down.
This tool is especially useful for anyone planning to buy a home, giving you a clearer sense of how much you can realistically borrow based on your current financial situation.
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