How Much House Can I Afford?
A Creative Answer
When you ask "how much house can I afford?", most answers probably tell you the largest mortgage you could get, based on your salary and other factors.
But that may not be the best answer to your query, because most mortgage calculators assume that you want a mortgage to buy a house to occupy. That may be the best answer for you, but there are other ways to get the home you want.
Below, we discuss some approaches that may enable you to get a home better than what normal mortage calculators suggest you could get.
Knowing What You Want
To answer the query "how much house can I afford?", you need to be very clear on what you want. For example, do you want:
- Long term return (the future value of your home)
- A good lifestyle (a good home, now)
- A 'place to call my own'
- A status symbol
- Somewhere to 'settle down'
When you ask "how much house can I afford?", what are you really wanting?
Our own "mortgage calculator" can help you explore the answer: how much house can I afford?. The mortgage calculator presents a number of statements for you to rate, to help focus on what you want, and then suggests approaches for you to assess. Mortgage/home purchase is one of them, but there are seven others as well.
Below we have a summary of those 8 approaches, supported by other pages that have more facts and examples. But, you may want to complete our 'mortgage calculator' before you read them, to see the results, and then come back to these pages afterwards.
The 8 approaches are:
- Purchase: cash and/or mortgage
Buy, construct or improve a house
- Shared Ownership
Buy part of a house, and someone else owns the rest
- Buy to Let
Buy to rent out and generate money
- Have Lodgers
Have lodgers to offset the cost of purchase or rental
Rent a large property and sublet the parts
- Occupy and sublet
Rent a large property, occupy a part, and sublet the rest
Rent a property
- Shared tenancy
You and someone else rent a property together
Each of the pages tells you about the approach, and also has a case study to show how the approach can be used to afford the home you want.
Some of these are rental rather than purchase. But, put them together, eg: rental and buy-to-let, and you may be able to get a home that seems beyond your means.
Most mortgage calculators tell you how much you can borrow. But, they don't tell you the best way to get the home you want and there are other approaches that may be better for you.
Our mortgage calculator helps you assess other approaches to explore the best strategy for your home. Or you can read about the 8 approaches, at some of the above pages, and see whether any are for you.
When you are unable to afford the type of house you want through a mortgage, some lateral thought may enable you to get there by other ways.