Money and Pensions Service: Mortgage Affordability Calculator
The mortgage affordability calculator is a simple tool that lets customers estimate how much they can afford to borrow to buy a home.
Tier 1 Information
1 - Name
Mortgage Affordability Calculator
2 - Description
Basic overview: In essence, the MoneyHelper Mortgage Affordability Calculator is a public-facing algorithmic tool that simplifies mortgage planning. It is used because it empowers individuals to make better, more informed decisions about one of the most significant financial commitments they may ever undertake.
How the Algorithmic Tool Is Used The MoneyHelper Mortgage Affordability Calculator is an online tool designed to help users estimate how much you can afford to borrow to buy a home. Users input key data points, including: • Income • Other incomes • Monthly expenses and commitments • Loans, credit card debts, utility bills After entering these details, the tool calculates the expected amount. It allows users to compare different conditions, and see how these changes affect the money they can borrow.
Why the Algorithmic Tool Is Being Used The calculator is used to: • Support Informed Decision-Making: It enables prospective homebuyers to understand the financial implications of their mortgage choices before making commitments. • Promote Financial Planning: By providing clear, personalised estimates, the tool helps users budget effectively and assess affordability. • Increase Accessibility: The tool makes complex mortgage calculations accessible to the general public, removing the need for advanced financial knowledge or manual calculations. • Empower Comparison: Users can easily compare different scenarios (e.g., varying salary, expenses) to find the most suitable configuration for their circumstances.
3 - Website URL
https://www.moneyhelper.org.uk/en/homes/buying-a-home/mortgage-affordability-calculator
4 - Contact email
Tier 2 - Owner and Responsibility
1.1 - Organisation or department
Money and Pensions Service
1.2 - Team
Technology and Change
1.3 - Senior responsible owner
Chief Digital and Information Officer (CDIO)
1.4 - External supplier involvement
No
1.4.1 - External supplier
N/A
1.4.2 - Companies House Number
N/A
1.4.3 - External supplier role
N/A
1.4.4 - Procurement procedure type
N/A
1.4.5 - Data access terms
N/A
2.2 Description
2.1 - Detailed description
Detailed Algorithmic Process 1. Data Collection and Normalisation The tool gathers user inputs such as annual salary, monthly take-home pay, other income, and details of monthly expenses (committed, fixed, and lifestyle costs). It standardises all values to a monthly basis to ensure consistency for calculations. 2. Income and Expense Profiling Calculates total disposable income by subtracting essential and lifestyle costs from net monthly income. Categorises expenses into: Committed costs (loan repayments, maintenance) Fixed costs (childcare, travel, bills) Lifestyle costs (entertainment, holidays, groceries) 3. Affordability Assessment Determines how much of the user’s income would be consumed by mortgage monthly installments plus essential costs. Compares this ratio against risk thresholds (e.g., spending more than half of take-home pay is flagged as high risk). Highlights affordability risks if the ratio exceeds safe limits. 4. Loan Amount Estimation Uses amortisation logic to estimate the borrowing range based on: Loan term (shorter term = higher monthly payments, longer term = lower payments but more interest overall) Interest rate (higher rates increase monthly installments) Generates a range (minimum to maximum) to reflect different scenarios. 5. Stress Testing Simulates interest rate increases (e.g., +3%) to show how repayments and remaining disposable income would change. Helps users understand potential financial strain under adverse conditions. 6. Scenario Analysis Provides comparisons for different mortgage terms and interest rates. Shows impact on monthly repayments and leftover income after essential and lifestyle costs. 7. Output and Recommendations Displays: Estimated borrowing range Monthly repayment amount Remaining disposable income Risk indicators (e.g., “You are at risk of overstretching your budget”) Suggests actions such as exploring government schemes, adjusting loan amount, or using a budget planner.
2.2 - Scope
Purpose of the Tool The Mortgage Affordability Calculator (MAC) is designed to provide individuals with an indicative estimate of how much they can borrow for a home purchase. Its primary purpose is to support financial planning by assessing borrowing capacity based on income, essential expenses, and lifestyle costs. The tool replicates key elements of lender affordability checks, including monthly instalment calculations and stress testing for interest rate changes, to help users understand potential risks before committing to a mortgage. It is intended as a decision-support resource, not as a formal lending offer.
Scenarios Designed For First-time buyers evaluating affordability before applying for a mortgage. Homeowners considering moving or refinancing and wanting to compare instalments options. Individuals exploring the impact of different mortgage terms or interest rates on monthly payments. Users seeking to understand whether a proposed mortgage fits within a sustainable budget.
Scenarios Not Designed For Determining exact loan approval amounts or lender-specific eligibility. Accounting for complex financial arrangements such as variable income, bonuses, or self-employment. Incorporating detailed credit scoring or underwriting criteria. Providing professional financial advice or predicting future changes in income, inflation, or unexpected expenses. Acting as a definitive guide for mortgage commitments—the tool offers estimates based on user-supplied data and standard assumptions only.
2.3 - Benefit
Justification for Using the Tool The Mortgage Affordability Calculator (MAC) is used because it addresses a critical public need: helping individuals make informed decisions about one of the largest financial commitments they will face. It supports government objectives around financial literacy, housing affordability, and consumer protection by providing transparent, accessible guidance. By being mapped under ATRS, MaPS ensures ethical oversight, accountability, and compliance with transparency standards, reinforcing trust in algorithmic tools used in public-facing services. Its role is not only advisory but preventative, reducing the risk of over-indebtedness and promoting sustainable financial behaviour.
Key Benefits Delivered 1. Financial Clarity and Empowerment The tool gives users a clear, personalised estimate of borrowing capacity and monthly installments based on income and expenses. This enables individuals to understand their financial limits, plan budgets realistically, and avoid overcommitment that could lead to financial stress. 2. Scenario Testing and Risk Awareness It allows users to model different scenarios, such as changes in interest rates or mortgage terms, to assess future affordability. This helps anticipate risks like rate hikes, compare repayment structures, and make informed decisions about remortgaging or adjusting loan terms. 3. Accessibility and Inclusion The calculator is free, web-based, and designed for ease of use, making it accessible to first-time buyers, remortgagers, and individuals with varying levels of financial literacy. Its compatibility with mobile and desktop platforms ensures broad reach and inclusivity. 4. Policy and Operational Efficiency For MaPS, the tool reduces demand on advisory services by providing self-service guidance, standardises mortgage advice across channels, and generates insights into user behaviour to inform future policy and service improvements. 5. Compliance and Ethical Assurance By being part of ATRS, the tool meets transparency and ethical standards set by the Cabinet Office. It ensures ongoing review, accountability, and responsible deployment of algorithmic decision-support systems in the public domain.
2.4 - Previous process
Here is a description of the decision making process:
-
Identification of Public Interest and Use Case The tool was recognised as having a direct impact on the public, particularly in helping individuals understand and plan for mortgage commitments. This justified its inclusion in the Algorithmic Transparency Recording Standard (ATRS), which is used to document and assess algorithmic tools that influence public-facing decisions.
-
Assessment of Purpose and Scope The team clearly defined the tool’s purpose: to calculate estimated budget that can be borrowed for a mortgage based on user inputs. It was scoped to support both new buyers and those remortgaging, with options for repayment and interest-only mortgages. This scoping ensured the tool would be useful for a wide range of users while remaining focused on its core functionality.
-
Evaluation of Algorithmic Logic The underlying logic—based on standard financial formulas for loan amortisation and interest-only calculations—was reviewed to ensure it was: a. Transparent b. Easily explainable to non-technical users c. Free from bias or automated decision-making that could affect eligibility or access
-
Risk and Impact Review The tool underwent a review to determine whether it involved any automated decision-making or posed risks to individuals. It was confirmed that: - The tool does not make decisions on behalf of users. - It does not assess creditworthiness or eligibility. - It is purely informational and advisory. This classification helped determine that the tool did not require additional safeguards such as human oversight or appeal mechanisms.
-
Documentation and Transparency The deployment was accompanied by documentation including: a. A summary for public understanding This ensured that users and stakeholders could understand the tool’s logic, scope, and intended use.
-
Approval and Release Following internal review and alignment with transparency standards, the tool was approved for public deployment via the MoneyHelper website. It was positioned as part of a broader suite of financial guidance tools.
2.5 - Alternatives considered
Alternatives Considered 1. Non-Algorithmic Alternatives a. Static Guidance Pages: These would provide general advice on mortgage affordability and repayment structures without interactive calculations. b. PDF Worksheets or Tables: Users could manually input values and refer to lookup tables to estimate the budget that can be borrowed for a mortgage. c. Telephone or In-Person Advisory Services: Users would speak to financial advisers to receive personalised estimates.
-
Other Algorithmic Approaches a. https://www.nationwide.co.uk/mortgages/mortgage-calculators/borrowing-calculator/ Nationwide: Tailored for prospective and current customers. Focuses on product-specific repayment estimates and includes options for comparing multiple mortgage types. b. https://www.barclays.co.uk/mortgages/mortgage-calculator/ Barclays: The calculator is a gateway to exploring mortgage deals with Barclays.
-
Justification for the Chosen Tool The Mortgage Affordability Calculator (MAC) was selected because it offers a transparent, simple, and user-controlled experience. Key reasons include: a. Simplicity and Accessibility: The tool uses well-established financial formulas that are easy to explain and understand. This aligns with the public-facing nature of the MoneyHelper platform. b. Transparency and Trust: Unlike predictive or eligibility models, the calculator does not make decisions or assumptions about the user. It simply reflects the inputs provided. c. Low Risk Profile: The tool does not involve automated decision-making or personal data processing, reducing ethical and regulatory risks. d. Cost and Maintenance Efficiency: Compared to more complex algorithmic systems, the calculator is easier to maintain, update, and audit. e. Alignment with ATRS Standards: The tool fits within the Tier 1 and Tier 2 documentation framework for algorithmic transparency, ensuring accountability and clarity.
-
Trade-offs and Limitations Acknowledged a. The tool does not simulate changes in salary or include fees and taxes. b. It does not assess affordability or eligibility. c. It is not suitable for complex mortgage products or financial planning.
-
These limitations were accepted in favour of delivering a focused, reliable, and low-barrier tool that supports financial literacy and decision-making without overstepping into advisory or regulatory territory.
Tier 2 - Decision making Process
3.1 - Process integration
Integration into the Decision-Making Process The Mortgage Affordability Calculator (MAC) is embedded as an advisory tool within the broader home-buying decision-making process. Its role is to provide impartial, data-driven insights that help users evaluate borrowing capacity and financial sustainability before committing to a mortgage. 1. Information Gathering Phase Users input key financial details such as income, essential expenses, and lifestyle costs. This step ensures the tool captures a realistic picture of affordability rather than relying solely on gross income figures. 2. Affordability Assessment The algorithm processes these inputs to calculate indicative borrowing ranges and monthly installment estimates. It also applies stress testing for interest rate changes, highlighting potential risks if circumstances shift. This analysis informs whether the proposed mortgage fits within a sustainable budget. 3. Risk Awareness and Scenario Testing The tool enables users to model different scenarios—such as varying mortgage terms or interest rates—so they can anticipate future affordability challenges. This feature influences decisions around loan size, term length, and financial planning strategies.
Influence on Decision-Making Advisory Role: The tool does not approve loans or determine eligibility; it provides estimates and warnings to guide informed choices. Financial Planning Support: By showing affordability ratios and remaining disposable income, it helps users decide whether to proceed, adjust borrowing, or explore alternatives. Risk Mitigation: Stress testing encourages users to consider long-term resilience, reducing the likelihood of over-indebtedness.
Wider Decision-Making Context Pre-Mortgage Phase: Supports early planning by helping users understand borrowing limits and budget implications before applying for a mortgage. During Mortgage Selection: Complements lender calculators by focusing on affordability rather than maximum borrowing, ensuring decisions are based on sustainability. Post-Decision Planning: Directs users to additional resources such as budget planners, government schemes, and financial advice services for ongoing support. Integration with Support Networks: Links to MoneyHelper guidance and external advisory services, creating a holistic ecosystem for financial decision-making.
The calculator functions as a decision-support tool, not a decision-maker. It empowers users with transparent, impartial insights while leaving final decisions in their hands.
3.2 - Provided information
Information Output and Presentation 1. Borrowing Range and Repayment Estimates The tool provides a personalised borrowing range based on user inputs, typically displayed as a minimum and maximum amount (e.g., £150,000 – £230,000). It also calculates an indicative monthly installments for the selected loan amount and term, helping users understand the financial commitment required. 2. Affordability Analysis Outputs include an affordability ratio showing what percentage of take-home pay would be consumed by mortgage repayments and essential costs. If this ratio exceeds safe thresholds (e.g., 50%), the tool flags a risk warning such as “You are at risk of overstretching your budget.” 3. Stress Test Results The tool models interest rate increases (e.g., +3%) and recalculates monthly repayments under these conditions. It then shows the remaining disposable income after essential and lifestyle costs, enabling users to assess resilience against future changes. 4. Budget Breakdown A summary compares current income, essential costs, and estimated mortgage payments. It highlights what is left over after living costs and provides a clear figure for discretionary spending, reinforcing whether the mortgage is sustainable. 5. Recommendations and Next Steps The tool offers practical advice such as exploring government schemes, using a budget planner, and understanding upfront costs. It also links to external resources for further guidance.
Presentation Format Structured Sections: Results are organised into clear categories—borrowing range, monthly repayments, affordability ratio, stress test impact, and remaining budget. Visual Elements: Key figures are highlighted, and tables are used for repayment scenarios across different terms and interest rates. Interactive Features: Users can adjust variables like mortgage term or interest rate to see real-time changes in affordability. Accessibility: Simple language, clear headings, and mobile-friendly design ensure usability for all financial literacy levels.
Influence on Decision-Making This output enables users to: Understand borrowing limits and repayment obligations. Evaluate affordability under normal and stressed conditions. Make informed decisions about loan size, term, and financial planning. Access additional resources for budgeting and home-buying support.
3.3 - Frequency and scale of usage
The Mortgage Affordability Calculator (MAC) tool is a widely utilised resource, engaging numerous users on a daily basis. Over the course of the reporting period from October 1, 2024, to September 30, 2025, the tool recorded significant user activity. The number of tool starts is 420k , while 335k successfully completed the process, generating results. This represents a tool completion rate of 79.8%, indicating the proportion of users who fully navigated the tool and obtained calculated outcomes.
3.4 - Human decisions and review
User Decision-Making Process The MAC supports a series of user-led decisions that shape the affordability assessment: 1. Providing Financial Inputs Users enter annual income, monthly take-home pay, and essential expenses such as bills, childcare, and lifestyle costs. This decision ensures the tool reflects their real financial situation rather than generic assumptions. 2. Selecting Mortgage Parameters Users choose the mortgage term (e.g., 25 years) and can adjust interest rates to model different scenarios. These choices influence installment amounts and affordability outcomes. 3. Reviewing Borrowing Range and Risk Indicators The tool presents a borrowing range, estimated monthly repayments, and affordability warnings (e.g., “You are at risk of overstretching your budget”). Users decide whether the suggested amount is sustainable or needs adjustment. 4. Scenario Testing Users can modify inputs—such as term length or interest rate—to compare outcomes and stress-test affordability under changing conditions. This iterative process helps refine decisions before committing to a mortgage.
Human Review Options User-Led Review: - Users can re-enter different values to test multiple scenarios. - They can compare repayment impacts under normal and stressed conditions. - The tool encourages users to interpret outputs as guidance, not as a final decision.
External Review and Advice The tool explicitly advises consulting mortgage advisers or lenders before making commitments. It recommends using additional resources like budget planners and government schemes for a holistic view. Professional advice is suggested for complex cases (e.g., variable rates, shared ownership).
Transparency and Verification All calculations are based on standard financial formulas, allowing users or advisers to verify results independently. No automated decision-making occurs—the tool does not assess eligibility or approve loans. All decisions remain with the user.
3.5 - Required training
-
Deployment & Maintenance Teams a. Technical training on financial formulas and tool business logic. b. Operational training for monitoring performance and responding to feedback.
-
Support & Advisory Staff a. User guidance training to explain tool outputs and limitations. b. Scenario interpretation to help users understand different mortgage options based on their finances and direct them to further resources.
-
Oversight Personnel a. Ethical and risk awareness training to ensure responsible use. b. Governance training for reviewing documentation and communicating with stakeholders.
3.6 - Appeals and review
Mechanism for review or appeal (available to the public): The results are illustrative and not a final financial determination. If users believe the results are inaccurate, they are encouraged to seek regulated financial advice, especially when dealing with complex redundancy situations. For users who feel the tool is inaccurate or not functioning as expected, there are multiple ways to provide feedback or seek additional help: These feedback channels ensure that any issues with the tool can be promptly addressed while offering users the opportunity to consult a financial advisor if needed. Report Issues: If users encounter bugs, errors, or inaccuracies, they can report these issues using one of the following methods: 1. Call the free helpline at 0800 011 3797 or use the webchat feature. 2. Complete the feedback form available at MoneyHelper’s feedback page (e.g. https://www.moneyhelper.org.uk/en/contact-us/feedback). 3. Participate in the navigation survey, which is presented after 120 seconds of using the site. 4. Contact staff directly through the contact page for a more detailed issue description (e.g. https://www.moneyhelper.org.uk/en/contact-us).
Tier 2 - Tool Specification
4.1.1 - System architecture
High-Level System Architecture The Mortgage Affordability Calculator (MAC) is a web-based component integrated into the MoneyHelper platform. It is designed to guide users through a structured digital journey, collecting financial inputs and generating real-time affordability insights. Below is a high-level description of its architecture and technical features:
Technology and Computation The tool operates as a secure web application hosted on the MoneyHelper website. All calculations are performed server-side using standard financial algorithms for loan amortisation and affordability ratios. No personal data is stored; inputs are processed dynamically and discarded after the session. The architecture prioritises security, efficiency, and compliance with data protection standards.
Key Technical Features 1. User Input Collection The tool captures essential financial details such as annual income, monthly take-home pay, committed costs, lifestyle expenses, mortgage term, and interest rate. These inputs form the basis for personalised affordability calculations.
-
Data Processing and Calculation The backend algorithm applies: a. Loan amortisation formulas to compute monthly repayments. b. Affordability ratio calculations to assess risk thresholds. c. Stress testing logic to model interest rate increases and their impact on monthly instalments.
-
Output Flow Results are generated in real time and displayed on the front-end interface: Borrowing range (minimum and maximum). Monthly repayment estimates. Affordability warnings and remaining disposable income. Scenario analysis for interest rate changes.
-
Guidance and Decision Support The tool provides actionable insights, including: a. Risk indicators (e.g., “You are at risk of overstretching your budget”). b. Recommendations for next steps, such as using a budget planner or exploring government schemes.
-
Dynamic User Interface The interface is interactive and mobile-friendly, allowing users to: Adjust variables like term length and interest rate. View updated results instantly. Navigate through structured sections with clear headings and visual highlights.
Reference Documentation For more details on functionality and user guidance:
https://www.moneyhelper.org.uk/en/homes/buying-a-home/mortgage-affordability-calculator https://www.moneyhelper.org.uk/en/homes/buying-a-home/mortgage-interest-rate-options
Code updates are maintained in a private GitHub repository, with release notes documented for production deployments.
4.1.2 - Phase
Production
4.1.3 - Maintenance
Yearly review to capture variations in legislations or on the other parameters. Changes in the legislation, are reflected in the code updates which are reviewed every year. Github code repository is not public. The parameters which are affected by regular review are reflected in the following Section 2.4.1.4 and include: - Salary - Other incomes - Expenses - Life style - Rent/mortgage
Code updates uploaded on our private GitHub repository.
4.1.4 - Models
-
Model Purpose The MAC is designed to estimate how much a user can afford to borrow and what their monthly instalments might be. It supports financial planning by: Calculating borrowing ranges and repayment amounts based on income, essential costs, and lifestyle expenses. Stress-testing affordability under interest rate changes. Providing actionable insights to help users avoid overcommitment.
-
Key Assumptions and Parameters The model operates under these assumptions: Interest rate remains fixed for the calculation period (though users can adjust for scenario testing). Payments are monthly and punctual. No additional fees, taxes, or insurance costs are included. No early repayment or overpayment scenarios are factored in. Lifestyle costs remain consistent during the mortgage term.
-
User Input The tool requires: Annual income and monthly take-home pay. Monthly committed costs (e.g., loans, childcare, bills). Lifestyle expenses (e.g., groceries, entertainment). Mortgage term (in years). Interest rate for calculation. Optional adjustments for scenario testing.
-
Calculation Logic Borrowing Range: Derived using affordability ratios and income thresholds, ensuring repayments do not exceed safe limits (typically 40–50% of take-home pay). Monthly Repayment: Computed using standard amortisation formula for repayment mortgages. Stress Test: Applies a +3% interest rate increase to show impact on monthly repayments and remaining disposable income. Affordability Ratio: Compares mortgage + essential costs against total income to flag risk levels.
-
Guidance and Outputs The tool provides: Borrowing range (minimum and maximum). Estimated monthly repayment for selected term and interest rate. Affordability warnings (e.g., “You are at risk of overstretching your budget”). Remaining disposable income after essential and lifestyle costs. Scenario analysis for interest rate changes. Links to MoneyHelper resources for budgeting and home-buying advice.
-
Transparency and Fairness Assumptions and limitations are clearly stated upfront. The tool does not assess eligibility or creditworthiness. Compliance with ATRS ensures transparency and accountability. Regular reviews maintain accuracy and alignment with financial guidance.
Tier 2 - Model Specification
4.2.1 - Model name
Mortgage Affordability Calculator (Rule-based model)
4.2.2 - Model version
Current version is 1.0.0
4.2.3 - Model task
The model estimates mortgage budget that can be borrowed based on input details.
4.2.4 - Model input
Model inputs include:
Income Details Annual salary before tax (gross income). Monthly take-home pay (net income after tax, NI, pension contributions, and other deductions). Optional additional income (e.g., bonuses, secondary income streams).
Expenses Committed monthly costs: Loan monthly instalments. Credit card payments. Child or spousal maintenance.
Fixed monthly costs: Childcare and school fees. Travel costs. Bills and insurance. Current rent or mortgage payment.
Lifestyle costs: Entertainment and leisure. Holidays. Food, groceries, and toiletries.
Mortgage Parameters Desired mortgage term (e.g., 25 years). Interest rate (default or user-adjusted for scenario testing).
4.2.5 - Model output
The model outputs the user’s predicted mortgage budget that can be borrowed
4.2.6 - Model architecture
The model is rule-based rather than machine-learning-based. It uses assumptions and calculations based on user input to project pension outcomes: Assumptions: Interest rate remains fixed throughout the mortgage term. Payments are made monthly and on time. No additional fees, taxes, or insurance costs are included.
The architecture of the calculator involves deterministic projections using these predefined assumptions and user inputs.
4.2.7 - Model performance
Performance and Accuracy of the Mortgage Affordability Calculator (MAC) The MAC’s performance depends on its ability to generate accurate monthly instalment estimates based on user-provided inputs and assumptions about interest rates, mortgage term, and repayment type. As a financial planning tool, it aims to provide illustrative results that help users make informed decisions about mortgage affordability. The accuracy of outputs is directly influenced by the precision of user inputs, and results are generated instantly once data is submitted.
Performance Testing and Quality Assurance Practices To ensure high-quality, accurate outputs and validate that underlying formulas and assumptions function as intended, several testing practices are applied during development and annual maintenance:
-
User Guidance and Input Validation The tool includes clear prompts and guidance to help users enter accurate data (e.g., property price, deposit, interest rate). These instructions reduce input errors that could lead to misleading repayment estimates.
-
Adjustment Flexibility Users can modify key assumptions—such as interest rate, mortgage term, and deposit amount—to test different scenarios. This dynamic functionality ensures the tool performs reliably under varied conditions.
-
Benchmark Testing Against Financial Standards Performance testing uses predefined scenarios based on standard mortgage calculation principles. These scenarios act as benchmarks to confirm that repayment estimates align with expected results. Updates are applied when market conditions or regulatory guidance change (e.g., interest rate adjustments).
-
Systematic Testing and Deployment Significant updates (e.g., formula refinements or UX improvements) are first implemented and tested in a development environment. The updated tool is validated against benchmark scenarios to ensure accuracy. Beta testing in a production-like environment confirms stability and performance under real-world conditions. Once the tool meets all quality standards, it is deployed for public use.
By following these practices, the MRC maintains a high standard of accuracy and reliability, ensuring users receive dependable repayment estimates based on current assumptions. This rigorous approach helps the tool meet user expectations and comply with transparency and quality requirements.
4.2.8 - Datasets
The dataset utilised for developing and validating the model used by the Mortgage Affordability Calculator consists of simulated scenarios of users data with varying combinations of inputs.
A dataset consisting of 100 various combinations and examples has been used for functional tests, and more than 100 for unit tests.
The functional test cases consist of a structured set of input data and corresponding expected outputs. For example, given specific input parameters such as: Annual Income, Monthly Take-Home Pay, Committed Monthly Costs, Lifestyle Expenses, Mortgage Term (years), Interest Rate (%)
The model is evaluated by comparing its output for monthly repayment amount, ensuring that results are calculated accurately according to the underlying formulas. All outputs are rounded to two decimal places for clarity.
4.2.9 - Dataset purposes
Use of Datasets During Model Development The MAC does not rely on machine learning or external datasets for training; instead, it uses deterministic financial formulas and structured test cases to validate accuracy and reliability. The development process involved:
- Simulated Test Cases for Validation and Testing Income and Expense Variations: Test cases included different annual incomes, monthly take-home pay, and expense profiles to ensure affordability ratios and borrowing ranges were calculated correctly.
Mortgage Parameter Scenarios: Term lengths from short (5 years) to long (40 years). Interest rates from low (1%) to high (15%) for stress testing. Different affordability thresholds to validate risk warnings.
Affordability Stress Testing: Simulated interest rate increases (+3%) to confirm recalculation logic for monthly instalments and remaining disposable income.
-
Calculation Verification Borrowing Range Accuracy: Ensured outputs matched expected affordability limits based on income and expense inputs. Monthly Repayment Precision: Verified amortisation formula outputs for repayment mortgages and interest-only scenarios. Output Formatting: Confirmed rounding rules (two decimal places) and clarity of affordability warnings.
-
Dataset Role Validation: All simulated cases were used to validate the correctness of formulas and logic under varied conditions. Testing: Edge cases (e.g., zero expenses, very high income, extreme interest rates) were tested to ensure stability and prevent calculation errors.
No training dataset was required because the MAC is rule-based, not predictive. Its logic is grounded in standard financial formulas and regulatory affordability guidelines.
Tier 2 - Data Specification
4.3.1 - Source data name
Mortgage Affordability Calculator (MAC) Test set - Simulated dataset
4.3.2 - Data modality
Tabular
4.3.3 - Data description
Annual Income, Monthly Take-Home Pay, Committed Monthly Costs, Lifestyle Expenses, Mortgage Term (years), Interest Rate (%)
4.3.4 - Data quantities
100 full complete scenarios (data containing all the inputs and expected outputs) to analyse functional aspects More than 100 combinations for unit tests.
4.3.5 - Sensitive attributes
Sensitive Attributes in the MAC Context The MAC primarily uses financial and expense-related data provided by the user. It does not collect personal identifiers (e.g., name, address) or demographic details such as age, gender, ethnicity, or other protected characteristics. However, when considering data protection and ethical design, the following inputs can be considered sensitive because they indirectly reveal financial status:
Sensitive Attributes Annual Income and Monthly Take-Home Pay: Indicates earning capacity and financial position.
Committed Monthly Costs (e.g., loans, bills): Reflects existing financial obligations and household structure.
Lifestyle Expenses (e.g., entertainment, holidays, groceries): Provides insight into personal spending habits and living standards.
Mortgage Term and Interest Rate: Suggests long-term financial planning and risk tolerance.
Borrowing Amount (derived from inputs): Implies wealth level and affordability threshold.
Why These Are Sensitive Although these attributes are not protected characteristics, they are financially sensitive because they can:
Indicate socio-economic status. Reveal household priorities and financial resilience. Serve as proxy variables for wealth or lifestyle.
Important Note: The MAC does not store or share this data. All inputs are processed in-session and discarded after calculation to maintain privacy and compliance with data protection standards.
4.3.6 - Data completeness and representativeness
Data has no missing points, and it moderately represents the target population.
4.3.7 - Source data URL
No available public URL
4.3.8 - Data collection
This dataset comprises a sample of scenarios with varying level of annual income and other parameters.
4.3.9 - Data cleaning
N/A
4.3.10 - Data sharing agreements
N/A
4.3.11 - Data access and storage
No data—personal, sensitive or otherwise—is stored. Data is temporarily stored in the browser during the user’s navigation through the tool, allowing them to move back and forth until they reach the final summary step (customers in this way can evaluate the impact of changes in the input parameters and how these affect the outcome). Once the browser window is closed, the session data is not persisted, and customers cannot return to their previous session.
Tier 2 - Risks, Mitigations and Impact Assessments
5.1 - Impact assessment
As part of our ongoing review of all tools, we have developed a new DPIA model for the Mortgage Affordability Calculator. This is based on the data we’ve collected and our latest analytics infrastructure. As a general practice, publicly-exposed tools that might use Personally Identifiable Information (PII) data, require a DPIA assessment.
The latest DPIA model has been approved on the 17th of Nov 2025.
Key Findings: Risk Level: Minimum, no relevant risks identified.
5.2 - Risks and mitigations
There are no relevant risks identified.