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Buying Budget

Calculation methodology

The formulas, assumptions and sources behind every calculator on this site.

Last reviewed 21 August 2026

Core formulas

Monthly repayments use the standard annuity formula, where P is the loan, r the monthly interest rate and n the number of monthly payments:

M = P · r ÷ (1 − (1 + r)^−n)

Property transaction tax is calculated marginally: each band applies only to the slice of the price within it. Loan-to-value is the mortgage divided by the property value. Amortisation and overpayment results are produced by month-by-month simulation rather than a closed-form approximation.

Editable rates, not a live market survey

The 5% starting rate and 7.5% sensitivity rate are illustrative inputs. We do not maintain a verified live lender sample, and we have removed the previous market-average table because its collection method and coverage were not established. Neither input is a Bank of England rate, a lender quote or a claim that you can obtain a particular deal.

Replace the rate with a dated quote for the relevant loan, deposit and product. Compare the same borrowing and term, allowing separately for fees. The constant-rate lifetime total is not a forecast: a short fixed deal can change well before the mortgage ends. Official and consumer sources below explain the context; they do not endorse our chosen defaults.

Lending assumptions

These rules describe our model, not a universal lender policy or an FCA-mandated income multiple. Lenders assess affordability individually. The gross-income ceiling is not a substitute for a budget based on take-home pay.

  • Income multiples of 4× to 4.75× (typical 4.5×), applied to income after regular credit commitments.
  • A secondary cap so total housing and debt costs stay within 45% of gross income.
  • Default illustrative rate 5% over 25 years, stress-tested at 7.5%.
  • Last reviewed 1 September 2026.

Sources:

Property tax data by jurisdiction

Buying cost defaults

Indicative UK-wide typical ranges gathered from published consumer guidance. These are budgeting assumptions, not quotations — always obtain your own quotes. Last reviewed 21 August 2026. Every default can be replaced with your own quote inside the calculator.

Testing and correction

Published review dates describe the stored data, not an automatic daily review. News feeds refresh separately and never update tax bands or calculator assumptions. Before relying on a time-sensitive figure, check the linked authority or obtain a current quote.

The calculation engine is covered by an automated test suite spanning each jurisdiction, first-time buyer relief, band boundaries, zero and negative inputs and unrealistic values. If you spot an error, please tell us — we check it against the source and update the review date when we correct it.

Per-calculator methodology

Each calculator restates its own formula, assumptions and limitations on its page: