Your mortgage lender needs to know exactly what you bring in each month, including your salary, bonuses and self-employment, to work out what you can afford to pay off - even if interest rates go up. Your income will be offset against your regular monthly payments such as credit card payments, existing loans, family commitments and pension payments, to come up with an accurate picture of what you can and can’t afford.
The bank or mortgage lender also has to think about:
● Whether the term runs past your expected retirement age
● Any changes to your household, such as caring for elderly parents or having children