Borrowing Calculators: Reliable?

I am in the process of figuring out how much I, along with my girlfriend can borrow for our first property. After completing various online mortgage-borrowing calculators I am surprised by just how much we would (in theory) be given. Certainly more than 4.5x our combined salaries.

I know that there is a lot than can affect the final figure, but we don't have children, we don't have debt, no adverse credit, good credit history, low spending habits (at most a monthly travelcard) etc etc. Our combined salary is fairly low but our deposit is decent (saving for many years). So are the figures from the calculators a reliable indicator of how much we could be given?

Would an agreement in principle offer a far more realistic and reliable figure? But should I expect the figure to be any different to those of the calculators?

Thanks for the help :j
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Comments

  • jaelato1
    jaelato1 Posts: 139
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    I have found that the online mortgage-borrowing calculators are reliable indicators of how much you can borrow but to be absolutely sure I'd look for a no-fee independent broker.
  • kingstreet
    kingstreet Posts: 38,686
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    As a broker, we would expect the affordability calculator and agreement in principle outputs to be the same, based on the same input data.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • LRmortgage
    LRmortgage Posts: 484
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    As long as the information you put in is correct then the figure they give you should be correct.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Thank you for the responses!

    In terms of our respective salaries etc, I have entered the precise information. I was under the impression we'd be given less than 4x our combined salary, especially given we are first time buyers. I'm guessing this would depend on each lender though.
  • LRmortgage
    LRmortgage Posts: 484
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    Depending on lenders, your loan to value and the term of your mortgage (generally longer mortgages = more borrowing allowed) then some lenders will go to 5 x joint income, less committed expenditure.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • getmore4less
    getmore4less Posts: 46,882
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    Work out what you can afford, even with the new tighter lending criteria personal affordability will b lower than the lenders are prepared to give you.
  • Work out what you can afford, even with the new tighter lending criteria personal affordability will b lower than the lenders are prepared to give you.

    Could you expand on what you mean by this please?

    Do you mean that the lender may offer you x and lend you x but the reality is that you can only afford to repay y (with y being a lower amount than x)
  • I found that I could borrow far more than the online calculators indicated.
  • kingstreet
    kingstreet Posts: 38,686
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    You have lender affordability and what a borrower feels comfortable paying back.

    These aren't necessarily the same things.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • kingstreet
    kingstreet Posts: 38,686
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    thomas1988 wrote: »
    I found that I could borrow far more than the online calculators indicated.
    Different lender, or incorrect data input?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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