Finance glossary
Affordability
Also known as: Affordability assessment, Affordability check
In simple terms
Affordability is whether you can realistically keep up the repayments on borrowing without it causing you hardship — and it is what a lender must check before lending to you.
On this page
What does affordability mean?
Affordability is about more than whether the numbers technically add up — it is whether you can make the repayments sustainably, without having to borrow more or cut back on essentials. Responsible lenders are required to assess this before lending.
For a mortgage, this includes a “stress test” to check you could still cope if interest rates rose.
How an affordability check works
A lender looks at your income and your regular outgoings — bills, other credit, childcare, living costs — to see what is left over for repayments. It may use bank statements, payslips, credit file data and standard expenditure estimates.
The aim, set by FCA rules, is to lend only what you can afford to repay. A lender declining you can therefore be a protection, not just an obstacle.
How could this affect me?
A strong, stable income and low existing debts improve affordability; lots of existing credit, irregular income or high outgoings reduce it. Improving your position before you apply can widen your options.
If borrowing was clearly unaffordable when it was granted and the lender did not check properly, you may be able to complain about “irresponsible lending”.
Things to watch out for
- Being offered credit is not proof you can afford it — do your own budget.
- Multiple applications in a short time can hurt your credit file and suggest overstretch.
- Interest-rate rises can make a “just affordable” mortgage unaffordable — allow headroom.
Know your rights
- FCA rules require lenders to carry out a reasonable assessment of affordability (creditworthiness) before granting most credit.
- If lending was unaffordable and poorly checked, you can complain to the lender and escalate to the Financial Ombudsman Service.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FCA, CONC 5 — responsible lending; MCOB 11 — mortgage affordability (opens in a new tab). Accessed 22 Aug 2026.