Finding out how much you can borrow on a mortgage and how much deposit you need is the first step you need to take when buying your home.

For many years how much you could borrow was a simple calculation of earnings – now though the calculation is based on affordability. The bank or building society will want to know about your regular spending. They look at car loans, nursery fees, gym membership, petrol and will even look at how regularly you have your hair cut – visit spas and go on holiday!

Spending can change radically when you buy your first house and, in many situations, buying rather than renting can mean more money in your pocket so you may well be able to afford your current spending but the banks and building societies factor in interest rate rises and can take a strict view on their affordability criteria.

It may sound a bit big brotherish, but it really will help to tidy up your spending now and cut back on more trivial regular spending in the months before you apply for a mortgage to ensure that you can borrow the amount you need and meet the lenders affordability criteria.

Car Loans

For many first-time buyers it is a natural process to get a job, get a car loan, through finance, and then look for a house and need a mortgage. Car finance will affect your mortgage affordability, so it can be advisable to wait until you are established with your mortgage before you get that new car.

Your home may be repossessed if you do not keep up repayments on your mortgage