How Much Can I BorrowYour Result You may be able to borrow between Show
Ready to discover the best mortgage rates?How much can I borrow on a mortgage?Before you start looking for your dream home, you need to know how much you're able to borrow in order to fund it. Generally, how much you can borrow will depend on four things. The amount you want to borrow in relation to the property's value (also known as the loan-to-value or LTV), your credit score, your income and your outgoings. You should be able to comfortably afford the mortgage when you take it out so that unforeseen events (such as interest rate rises or redundancy) don't put your home in jeopardy later on. Remember, although the lender or mortgage broker is responsible for checking whether you can afford a particular mortgage, making sure you can easily manage the repayments you're taking on will give you valuable peace of mind before you apply. What can impact how much I can borrow for a mortgage?Should I speak to a mortgage broker?Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice. Speak to an award-winning mortgage broker todayMAB is the preferred mortgage broker of moneyfacts.co.uk  Get friendly, expert advice free of charge as a visitor of moneyfacts.co.uk. Mortgage Advice Bureau have 1,600 UK advisers with 200 awards between them. Speak to an award-winning mortgage broker today. Call 0808 149 9177 or request a callback Mortgage Advice Bureau offers fee free mortgage advice for Moneyfacts visitors that call on 0808 149 9177. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm excluding bank holidays. Calls may be recorded. Your home may be repossessed if you do not keep up repayments on your mortgage. Loan to value (LTV) and the size of your depositAll mortgages require some form of deposit, but they are not directly linked to how much you could borrow. The loan to value or LTV of your mortgage, means how much the mortgage is in relation to the value of the property. So, if you have a £50,000 deposit for a £200,000 property, the mortgage you need would be £150,000 – 75% of the property's worth, or 75% loan-to-value. A higher credit score could increase what you can borrowYour credit score has a big part to play in how much you can borrow. In the most extreme cases a low credit score could prevent a mortgage lender from even considering you or, more likely, a low score could mean that the lender uses a lower multiple of your income to decide how much you can borrow. That’s why you’ll want to make sure your credit score is up to scratch before you even consider applying for anything. Our guide on improving your credit rating will be able to help you with this. Concerned about the cost of living crisis?We’ve compiled our most popular guides related to money-saving and debt into one page to help consumers navigate through the cost of living crisis in the UK. Income is a significant part of deciding how much you could borrowIncome is crucial for determining how big a mortgage you can have. Traditionally, mortgage lenders applied a multiple of your income to decide how much you could borrow. So, if you earn £30,000 per year and the lender will lend four times this, they may be willing to lend £120,000. (Remember that each lender will have different criteria and will offer different income multiples, so always do your research.) When it comes to households with two incomes, some lenders offer a choice: • The option to add the second income on top of the multiple, so if the main
breadwinner earns £30,000 and the second person's income is £15,000 a lender might offer 4x the first income, plus the second income (4 x £30,000 + £15,000 = £135,000) • A slightly lower multiple for two incomes than for one. So £30,000 + £15,000 = £45,000. Then £45,000 x 3 = £135,000 Many lenders now only use income multiples as an overall maximum that they will lend, conducting a detailed affordability assessment to decide how much they are willing to lend. This is something that has become particularly strict following mortgage regulations introduced in 2014. If part of your income is comprised of a bonus or overtime, you may not be able to use this, or if you can, you may only be able to use 50% of the money towards what the lender deems as your income. All income you declare in your mortgage application will need to be proven – usually through you providing your latest pay slips, pensions and benefits statements. Could a specialist mortgage support your plans?Higher outgoings reduce how much you could borrowYour regular household expenses, debts and insurances can all affect what a mortgage lender will let you borrow. Outgoings that a lender may take into consideration include: • Loan and credit card repayments Some lenders also apply a reduction to the amount you can borrow for the number of children you have (assuming an average monthly expense), while others have started to take things like discretionary spending into account. They'll also require you to prove that you can afford the repayments in the event of an increase to interest rates, so make sure you have suitable means to ensure that – ideally through reducing your unnecessary expenditure – as this could have a clear impact on the amount of mortgage you'll be able to borrow. How do lending multiples work?When it comes to households with two incomes, some lenders offer a choice:
Many lenders now only use income multiples as an overall maximum that they will lend, conducting a detailed affordability assessment to decide how much they will actually let you borrow. All income you declare in your mortgage application will need to be proven, usually through you providing your latest pay slips, pensions and benefits statements. Can I borrow up to five times my salary?It is possible to borrow five times your salary but only if you meet the lenders affordability tests and requirements for loan-to-value and minimum salary. To get a mortgage of this scale, you’re likely to need a deposit of at least 10%, if not more to have access to a wider range of mortgage deal and may face a maximum lending cap. Some borrowers may look to lengthen their mortgage term to thirty years help make monthly payments more affordable. Can I include overtime payments when calculating how much I can borrow for a mortgage?This depends on both how regular your overtime is and the attitude of the lender concerned. Some lenders will not consider any additional income you may receive through overtime, while others may accept all or 50% of this income. Any earnings from overtime to be included as part of your mortgage application will need to be regular or guaranteed and be evidenced. If however overtime is something you only get occasionally then the lender may not take it into account at all. This is where a mortgage broker can help – they will know which lenders are more likely to accept overtime as part of their income calculations. How much can I borrow for a mortgage based on my income?Lenders need to show that the mortgage is affordable and that you could continue to pay your mortgage should there be a rise in interest rates, or you have a significant change in circumstances such as losing your job or having a child. Lenders also have regulatory restrictions that limit their new lending above 4.5x salary to a maximum of 15% of all new mortgage loans. This means lenders can be very specific in deciding exactly which borrowers they want for these mortgage deals. To find out more take a look at our What are mortgage affordability checks guide. How much can I afford to borrow?Knowing how much you may be able to borrow is one thing, but knowing how much you can comfortably afford – and being confident in your ability to keep up with your repayments – is another. This is why you’ll need to carefully go through your outgoings, making sure to use a mortgage repayment calculator so you get an idea of what your repayments could be and whether you could absorb them in your current salary. Bear in mind that if you’re moving to a bigger property there could be additional expenses to pay, and if you’re moving from rented accommodation into homeownership, your outgoings could change again, and that’s before we even get to the additional costs of moving (legal fees, stamp duty, conveyancing etc.). This means it’s vital to go through everything in advance to make sure you’re prepared for the impact on your finances. Once you’ve tallied everything up, you can make a decision about the kind of mortgage you can comfortably afford. Though make sure to be realistic – it’s generally recommended that no more than 28% of your household income should go on housing expenses, so if your final total is above this level, it may be worth reconsidering. Should I take the maximum I can borrow?Again, this all comes down to your own personal level of affordability, and how comfortable you are with being able to afford the maximum amount. Remember that the bigger the mortgage, the higher your repayments are going to be, so while it can be tempting to take the maximum amount offered – particularly if it means you can afford a larger property – it may be wise to exercise a bit more caution. How can I drop an LTV band?To drop a loan-to-value band you’ll need to secure a larger deposit or increase your equity, which will allow you to secure a smaller mortgage in relation to the value of your property. If you can’t afford a larger deposit, the only other way to secure a lower LTV is to buy a cheaper property, which would mean your deposit takes up a higher proportion of the property’s value and would reduce your LTV accordingly. Choosing the right mortgage for youUsing our mortgage calculatorOur mortgage calculator can help you determine how much you might be able to borrow based on your salary. Just input your annual income and guaranteed overtime – together with that of the second applicant, if you’re applying for a joint mortgage – and you’ll be shown the minimum and maximum you may be offered. Remember though that income isn’t the only factor lenders will take into account when determining how much you’ll be able to borrow, so this should purely be used as a guide. Once you have an idea of the maximum amount you’ll be able to borrow, you can start to compare different mortgages Our mortgage charts allow you to search for a mortgage based on your circumstances, giving an overview of the products available and helping you narrow down the options. You may want to speak to an independent broker for a more personalised look at the products available, too. Do mortgage calculators require a credit check?No, you won’t need to undergo a credit check when using mortgage calculators, as the only information you’re inputting is your basic salary – no other personal details are required. This means there’ll be no searches appearing on your credit report and no impact on your score, but if you’re concerned that your current score may be holding you back from getting the best deals, now’s the time to work on improving it. Find a free credit check service. How many times your salary can you borrow for a mortgage?How much you’ll need to earn for a particular size mortgage varies from lender to lender, and they’ll often be more concerned about how much you can afford to pay back rather than a straight income calculation. That said, 4.5x your income is generally the maximum amount you’ll be able to borrow, so here we go through a few scenarios to help you get an idea of the amount you could be offered. How much do I need to earn for a £100,000, £250,000 or £500,000 mortgage?Our calculator shows that for a £100,000 mortgage you will need to earn at least £22,500 as a single applicant or between you if you’re applying for a joint mortgage. Bear in mind that a £100,000 mortgage can result in different LTVs and therefore different rates, depending on the amount of deposit you have and the overall value of the property. For a £250,000 mortgage you will need to earn at least £56,000 as a single applicant or between you if applying as a couple, while for a £500,000 mortgage you will need a earn at least £111,500 as a single applicant or as joint income for a shared mortgage. How much income do I need for a £200,000 mortgage?Let’s say your ideal home is worth £225,000 and you’re able to put up a £25,000 deposit. For a £200,000 mortgage you’ll need to earn a minimum of £44,500, though to be more comfortably offered this level of mortgage you’d probably need to earn closer to £50,000 or above. It’s also worth noting that this mortgage would equate to a loan-to-value of 88.9% in this scenario, which means first-time buyer mortgage dealswould be your best bet. Need to work out your LTV, use our LTV calculator. What mortgage can I afford on £60,000?If you’re earning £60,000 a year, you may be offered a mortgage of between £180,000 and £270,000, depending on your lender and financial circumstances. Can I buy a house making £40,000 a year?Based purely on your income, then yes, you’d be able to buy a house when making £40,000 a year, and you could be offered a mortgage of up to £180,000. However, whether you’d be accepted for such a mortgage depends on a whole range of other factors. How much do I need to make to afford a £150k house?This depends on the amount you’re able to put down as a deposit. If you’re a first-time buyer and only have a 5% deposit to put down, you’d need to be earning around £32,000 to be offered the £142,500 mortgage required for a £150,000 house. If on the other hand you could put down a deposit of 10% you might only need to earn £30,000, or if you had a 20% deposit, you’d need a smaller mortgage of £120,000 and therefore a lower salary of around £27,000. Remember that if you’re buying jointly, the income requirements can be split between you. How much would a £100,000 mortgage cost per month?This would depend on the term of the mortgage and the interest rate you’re paying, but if we take a typical 25-year mortgage at a rate of 2.5%, your monthly repayment on a £100,000 mortgage (based on capital and interest repayment) would be £448.62. You can find more repayment scenarios by heading to our mortgage repayment calculator. Compare mortgages Receive our NewslettersAll of our newsletters are available free by email to all Moneyfacts.co.uk users. 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Should I use a mortgage broker? A mortgage broker specialises in finding mortgage lenders who will meet your needs for a mortgage. They do this by providing you with advice and recommending the mortgages most suitable for you. They will then manage completing your mortgage application. Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive rates. What are mortgage affordability checks? In a nutshell, the affordability checks are designed to ensure that you can afford the mortgage repayments – both now and when interest rates rise In a nutshell, the affordability checks are designed to ensure that you can afford the mortgage repayments – both now and when interest rates rise Is your credit rating good enough for a mortgage? Never assume your credit score is high enough before you attempt to apply for a mortgage. Our helpful guide explains everything you need to know before applying. Never assume your credit score is high enough before you apply for a mortgage. Our helpful guide explains everything you need to know before applying. What income can I use for a mortgage application? To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains. To get an accurate affordability check you'll want to know what counts as income, so you can declare everything you have to offer. Our helpful guide explains. How much mortgage can I get on 30k salary UK?The amount you can borrow will vary between lenders, but - assuming you pass affordability checks - most lenders allow you to borrow up to between 4.5 and 5.5 times your annual salary. That means that if you earn £30,000, you may be able to get a mortgage of around £150,000.
Can I get a mortgage on 25k a year UK?Traditionally, the size of a mortgage is decided by applying a multiplier to income. For example, if you earn £25,000 a year, a lender might multiply that figure by four to arrive at a mortgage offer of £100,000. It's rare for a lender to multiply your income by a lot more than four.
How much mortgage can I get on 60k salary UK?If you're earning £60,000 a year, you may be offered a mortgage of between £180,000 and £270,000, depending on your lender and financial circumstances.
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Mortgage calculator how much can i borrow on my salary
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