Lenders assess what they believe you can comfortably afford in terms of payments, allow for interest rates increasing a little in future years, then translate that into a maximum loan amount.
The main factors are
• Your income, outgoings and any expected changes to these
• Your other credit commitments
• Your credit history
• How much deposit you can afford

As different lenders apply different criteria to this calculation its not uncommon to get very different answers from one bank to another.

We can usually give you a headline view of your likely maximum borrowing achievable over the phone in 5-10 minutes. Thereafter we look to firm up on that quickly by conducting our mortgage interview and getting an ‘approval in principle’ – this is where a chosen lender tells us what they would lend you following a preliminary application, subject to finding a suitable property and being able to prove any information provided.

An Approval in Principle from a lender (also known as a Decision in Principle) gives you confidence in the price of property you can afford and speeds up the mortgage process once you’ve found the right home. Many estate agents will not remove a property from market until they at least have sight of an approval in principle so as they know you’re a serious buyer.