When life circumstances shift—whether due to separation, legal proceedings, or major financial planning—understanding your mortgage affordability becomes more than a matter of curiosity. In 2025, mortgage capacity reports are being used more frequently in divorce courts, estate arrangements, and complex financial cases. But what exactly is a mortgage capacity report, and why might you need one?

What Is a Mortgage Capacity Report?

A mortgage capacity report is a formal document that outlines how much a person could potentially borrow on a mortgage, based on current financial information and lender criteria. It’s typically produced by a qualified mortgage broker or financial professional and is used to support legal or financial proceedings.

This is not the same as a mortgage in principle (MIP). Where an MIP is often based on minimal detail and used to support a property offer, a mortgage capacity report goes deeper—offering a realistic view of borrowing potential using detailed income, debt, and affordability analysis.

Why You Might Need One

Mortgage capacity reports are most commonly required in:

• Divorce or separation proceedings
  Where the court needs to understand how much each party could realistically borrow post-settlement.
• Child custody or maintenance negotiations
  To support or challenge financial support proposals based on real affordability.
• Estate and probate planning
  When assessing whether a beneficiary can refinance or take over a property.
• Financial settlement disputes
  When one party believes the other has overstated or understated their ability to secure housing.
• Tax or legal planning
  Especially where trusts or high-value estates are involved, and refinancing options are being considered.

These reports are also being used proactively by clients in complex financial scenarios—especially those involving joint borrower, sole proprietor mortgages, portfolio refinancing, or property held in trust.

What’s Included in a Mortgage Capacity Report?

A good capacity report should include:

• A full breakdown of income (employment, self-employment, dividends, pensions, etc.)
• Current liabilities (loans, credit cards, existing mortgages)
• An affordability assessment aligned to current lender criteria
• An indication of achievable mortgage borrowing based on known circumstances
• Commentary on variables (e.g. age, term, property type, credit history)
• Evidence backing the assumptions (such as payslips, SA302s, or bank statements)

In 2025, with lender criteria shifting frequently, it’s vital that these reports are based on whole-of-market research rather than a generic calculator or a single bank’s affordability model.

Are They Legally Binding?

No—but they carry significant evidentiary weight.

A court may request or order a capacity report as part of financial disclosure. And while it’s not a lending decision, the realism of the assumptions used can help or hinder your case.

That’s why courts and solicitors increasingly prefer these reports to be produced by qualified, regulated mortgage advisers who can support their conclusions with actual lender criteria.

What It Means for Borrowers in 2025

The landscape of mortgage borrowing is far more nuanced today. A capacity report in 2025 needs to consider:

• Rising living costs and revised affordability models
• Income variability (e.g. dividends, bonuses, self-employed income)
• Tightened stress tests for repayment affordability
• Evolving lending appetite for older borrowers or later-life lending

That means generic online tools or DIY affordability estimates may no longer cut it—especially in court.

How Willow Private Finance Can Help

At Willow, we regularly produce formal mortgage capacity reports for solicitors, estate planners, and individuals navigating complex life events. As a whole-of-market broker, we understand how lenders assess affordability in the real world, not just on paper.

We work with:

• Clients going through divorce
• Solicitors and family lawyers
• High-net-worth individuals with layered income sources
• Estate executors dealing with probate refinancing
• Trustees evaluating financing options for trust-held assets

We ensure that the reports we issue are defensible, realistic, and rooted in up-to-date lender data—so you can rely on them when it matters most.

Related Reading

If you’re exploring this topic, you might also find these blogs helpful:

• Navigating Joint Borrower Sole Proprietor Mortgages in 2025
• Trusts and Property Finance in 2025
• Interest-Only Mortgages in 2025

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you find the smartest way forward—whatever rates do next.