Free tool
Case-study questions open with the numbers: the loan, its LTV, the income multiple and the monthly payment. Get those right and the rule questions that follow are easier to place.
An income multiple is a screening figure, not the affordability test. Under MCOB 11.6 a lender must assess, on evidence of income and committed and basic household spending, that the borrower can afford the payments, and must consider the effect of likely interest rate rises.
Working LTV off the price when the valuation came in lower. A £270,000 loan on a £300,000 price is 90%; if the valuation is £290,000 it is 93.1%, which moves the case into the next tier.
For study and general guidance only, not tax, mortgage or financial advice. Figures checked 11 Oct 2026 against FCA Handbook MCOB 11.6 (responsible lending). Rules change; confirm with the source before relying on a result.
Studying for CeMAP?
MRT1 sets these sums: stamp duty, LTV and affordability. Practise exam-style questions with worked explanations, free to start.
Start practising free →Go deeper for the exam: Affordability, suitability, risk and term (MRT1).
Divide the loan by the property's value and multiply by 100. On a purchase, use the lower of the price and the lender's valuation: a £270,000 loan on a £300,000 home is 90% LTV.
Under MCOB 11.6 the lender must check, using evidence of income and spending, that the borrower can afford the payments, and consider the effect of future interest rate rises. An income multiple is only a starting point.
The loan divided by the applicants' total gross annual income. A £225,000 loan on £50,000 of income is 4.5 times income.
