If you’re in need of a mortgage, you will understandably want to know how much you can borrow.
In this guide, we will consider your salary and how much income has a part to play in your chances of getting offered the best mortgage deals with lower interest rates.
We will also give you advice on how to increase your chances of receiving more money from a mortgage lender.
How Much Mortgage Can You Borrow Based On Your Salary?
‘How many times your salary for a mortgage?’ Typically, mortgage lenders offer 4-4.5 times your salary. However, if you have little to no debt, a higher than average UK salary, some lenders can offer 5 times and even 6 times your salary and in some cases even higher than that. Use our guide to accurately calculate your mortgage borrowing capacity.
What are mortgage income multiples?
When delving into mortgages, it’s crucial to understand what mortgage income multiples mean. Essentially, these are just a way for you to figure out a ballpark figure for your Mortgage Affordability. When we talk about how much salary you can borrow for a mortgage, it is based on Income Mortgage Multiples. Mortgage lenders use a simple formula: multiplying not just your salary but the total annual income for all applicants to determine how much they might lend you.
Take this scenario: If you apply for a mortgage with your partner and your joint yearly income is £60,000 and the lender applies a multiple of 4, they’d multiply your joint income by 4. So, 4 times £60,000 equals £240,000 – that’s a rough guide to how much the lender might consider lending you. It’s a straightforward yet vital concept to grasp as you navigate your mortgage options.
Calculate How Much You Can Borrow For A Mortgage
Our mortgage affordability calculator can help you figure out the amount of money a mortgage lender may lend you based on your combined household income. Just enter the full combined income for all applicants, and our calculator will take care of the rest.
It is important to remember that mortgage calculators only offer an approximate estimate; they cannot consider individual circumstances, so there could be other elements that would affect how much much you could borrow in reality.
Mortgage Borrowing Calculator
For a more detailed and personalised mortgage affordability, use our Mortgage Affordability Calculator here >
To have an exact assessment of how much you’re able to borrow, consider working with a fee free mortgage broker. They’ll build a personalised calculation for multiple mortgage lenders based on your financial situation.
It’s essential to remember that some mortgage lenders don’t use income multiples to work out what you can borrow; their assessment is much more sophisticated. Simplistic online mortgage calculators won’t give an accurate representation of the amount they are able to lend you. To discover how much you can truely borrow and which lender will lend you the most, it is often required for you to contact a mortgage broker.
Did you know that working with a mortgage broker gives you access to 33% more of the mortgage products available
How your salary affects what you can borrow for a mortgage
Before mortgage lenders approve your application, they will carry out an affordability assessment. This is a kind of ‘stress test’ where they look into your income and monthly outgoings and look ahead to assess whether you’ll be able to afford your mortgage payments should interest rates rise or if your circumstances change.
What’s looked at in the mortgage lenders mortgage affordability stress test?
Every lender will look at your regular income and outgoings. These usually include but are not limited to the below.
Your income will include:
- Your annual salary
- Any benefits that you receive
- Any additional income, such as money gained from investments
Your outgoings will include:
- Debt repayments, such as credit card bills and student loans
- Your household bills, such as gas, electricity, and broadband
- Money spent on grocery shopping
- Transport costs
- Subscription costs
- Money spent on leisure activities
If the level of income you receive from your salary and other earnings is enough for you to pass these affordability tests, you may be eligible for a mortgage. However, this will also depend on your outgoings and whether your spending is close to your earnings, as your mortgage application may be turned down if your expenditure is high.
Can I borrow 5 times my salary for a mortgage?
Typically, a bank or building society will lend you 4.5 times your annual income. However, there are some lenders currently lending mortgages 5 times your salary. If you live alone, this will be based on your salary (and additional income) and if you live with another person, your joint income will be taken into account.
You could use a mortgage borrowing calculator to estimate the amount you may be able to lend from a mortgage provider.
Alternatively, you can do the maths yourself by multiplying 4.5 times your income over the past year.
If your salary was £40,000 per year, for example, you may be able to borrow £180,000 towards your mortgage. You would be eligible for more than this if you lived with a partner as your household income would be increased.
Can I borrow 6 times my salary?
In certain circumstances, you may be eligible to borrow more than 4.5 times your income. It’s not unusual for lenders to offer mortgages that are 5 or even 6 times larger than their customer’s total household income but your eligibility for a larger income multiple will depend on your employment status and the size of your deposit.
These higher salary multiples for a mortgage only equate to around 15% of all UK mortgage lenders offerings. How can you get a mortgage for 5, 5.5, or even 6 times your salary? To achieve a higher mortgage multiple you typically need to meet specific criteria:
- Possessing a deposit that’s at least 25% of the property’s value. (75% Loan To Value Mortgages)
- Being a high-net-worth individual.
- Working in certain professions, like medicine or law. (Mortgages for Professionals)
Example calculations
To estimate how much mortgage you may be able to borrow, you can have a go at the maths yourself or use a mortgage affordability calculator to estimate your maximum mortgage amount.
For your convenience, you can also check out the income calculations in the table below.
| Annual Income | 4x Salary Mortgage | 4.5x Salary Mortgage |
|---|---|---|
| £20,000 | £80,000 | £90,000 |
| £30,000 | £120,000 | £135,000 |
| £40,000 | £160,000 | £180,000 |
| £50,000 | £200,000 | £225,000 |
| £60,000 | £240,000 | £270,000 |
| £70,000 | £280,000 | £315,000 |
| £80,000 | £320,000 | £360,000 |
| £90,000 | £360,000 | £405,000 |
| £100,000 | £400,000 | £450,000 |
5 Ways To Improve Your Chances Of Borrowing More For Your Mortgage
If you want to improve your borrowing potential, there are a number of steps you can take.
1) Increase your income
If you earn any supplemental income on top of your basic salary, you may be able to borrow more money.
Supplemental income can include:
- Overtime payments
- Bonuses
- Commission
- Shift allowances
- Income from a second job
Please note:
Not all mortgage lenders will consider supplementary income and there are some that will only consider certain types of additional income. Below is a list of income types that are generally accepted by some mortgage lenders.
| Income Types | % Considered | Notes |
|---|---|---|
| Basic Pay | 100% | Taken from payslips/contract |
| Regular Overtime | 50-100% | Usually average of last 3 months |
| Irregular Overtime | 0-100% | Usually average of last 3 months |
| Annual Bonus | 0-100% | Taken from payslips/P60 |
| Quarterly Bonus | 0-100% | From payslips (Usually avg. of last 12 months) |
| Monthly Bonus | 0-100% | From payslips (Usually avg. of last 3-12 months) |
| Commission | 0-100% | From payslips (Usually avg. of last 3-12 months) |
| London Weighting | 0-100% | From payslips |
| Car Allowance | 0-100% | From payslips |
| Shift Allowance | 0-100% | From payslips (Usually avg. of last 3 months) |
| Rental Income | 50-100% | Based on average rental income; proof from tenancy agreements may be required |
| Investment Income | 0-100% | Earnings from investments, dividends, or interest; consistency and documentation required |
| Pension Income | 100% | Regular pension income; documentation such as pension statements required |
| Self-Employment Income | 50-100% | Average income over 2-3 years; requires tax returns and business accounts |
| Part-Time/Second Job Income | 0-100% | Regular and stable income required; may need a history of at least 6-12 months |
| Freelance/Contract Work | 50-100% | Requires a consistent work history; tax returns and contracts can be used as proof |
| Disability Income | 100% | Regular disability benefits; proof of long-term receipt may be required |
| Other Government Benefits | 0-100% | Consistent government benefits; documentation required for proof |
To access those lenders that do consider supplementary income, speak to a whole of mortgage market broker such as ourselves. We have contact with a wide number of mortgage providers within the mortgage industry, including those specialist lenders that can’t be found on the high street.
2) Increase the size of your deposit
The minimum deposit requirement for a mortgage is usually a 5% deposit to a 10% deposit for a residential purchase so you don’t necessarily have to save up much more than this for your deposit. First-time buyers often struggle to save more so these high loan-to-value mortgages are a useful way to get onto the property ladder.
However, to qualify for the best mortgage deals and to increase your borrowing potential, a larger deposit will improve your chances.
If you can provide a 15% deposit or more, mortgage providers will consider you a safer bet. As such, you may become eligible for a mortgage at higher multiples of your income, with more competitive interest rates and lower monthly repayments. How much your mortgage costs will depend massively on your deposit.
3) Use a guarantor
If your income isn’t enough to achieve a larger mortgage, it might be that a guarantor mortgage is an option. In some cases, you might even be eligible to borrow up to 100% of the property’s value, but this is usually very rare.
Guarantor mortgages can also be considered if you are only able to make a small deposit or if you don’t have a good credit score.
You will need to find somebody willing to be a guarantor if you want to go down this route. This should be somebody who is happy to use their own property or savings as security for the mortgage and who has a strong relationship with you. In most cases, borrowers ask family members to be their guarantors.
You are more likely to be approved for a guarantor mortgage if the potential guarantor…
- Is a homeowner
- Has paid off half or all of their mortgage
- Is able to make their monthly mortgage repayments while potentially covering yours
- Has a healthy credit report
4) Consider a joint mortgage
If your salary isn’t sufficient for a higher-income multiple mortgage, you may be able to access a bigger loan through a Joint Income Mortgage.
You might also consider this option if you want a mortgage that is 4.5 times your salary, as interest rate rises and the increase in house prices in some areas have made it difficult for some people to get on the property ladder.
Mortgage providers will use the combined income of everybody on the mortgage application when determining how much they are willing to lend to you.
Joint mortgages aren’t only given to married or unmarried couples. If you would like to move into a house with a group of friends, and you would rather buy a house with them than rent a property, you may be eligible for a combined mortgage.
If you have a parent or another family member willing to help you move into your own property, this is another way to increase your borrowing via a joint mortgage.
Most lenders will let you get a mortgage with up to 4 other applicants. You may struggle to find these lenders on your local high street so you should approach a mortgage specialist if you are interested in this option. Speak to a member of our team to learn more.
5) Speak to a whole of market mortgage broker
High street lenders will often limit how much they are willing to lend to borrowers. Therefore, it is wise to speak to mortgage brokers who have access to the whole mortgage market including specialist lenders that aren’t so restrictive.
At YesCanDo Money, our specialist team of mortgage brokers can explore all of your borrowing options with you, including those lenders that are more likely to lend you 5 or 6 times your salary, whether you’re self-employed or in full-time employment.
Get in touch with us to learn about our more about the help we can give you.
Do all lenders offer higher income multiples?
Not all lenders advertise loans with high-income multiples so it’s worth speaking to a broker to find out which ones do.
In some cases, you might need to turn to a specialist lender if you want to want to qualify for a mortgage that is over 5 times your income. As we have access to these lenders, we will be able to contact them on your behalf.
When it comes to lenders on your local high street, Barclays, HSBC, Halifax, and Kensington Mortgages are among those that may be able to lend you a higher amount under the right circumstances. Their lending criteria will differ so talk to us about their suitability for your circumstances and the mortgage products that may be able to offer you.
Get In Touch With YesCanDo Money Today
Speak to a mortgage broker at YesCanDo Money if you would like to compare mortgage deals to get the lowest rates.
After carrying out an affordability assessment to find out more about your personal circumstances, we will use our mortgage calculators to estimate how much you may be eligible to borrow.
Your appointed mortgage broker will also give you mortgage advice on how to improve your borrowing chances. Most lenders will consider your application if you meet their criteria but if there is a chance that you might be turned down for a mortgage, we will put you in touch with those specialist lenders that are more suited to your profession and level of salary.
Contact us today if you would like to learn more and begin your mortgage journey with us.
FAQS
How many times your salary can you borrow for a mortgage UK?
In the UK, lenders typically offer mortgages up to 4-5 times your salary. However, this can vary based on your financial situation and the lender's criteria.
Is a mortgage 3 or 4 times your salary?
Mortgages are often 3-4 times your salary, but many UK lenders tend to offer an average of 4 - 5 times salary. The exact amount depends on your financial circumstances and the lender's policies.
Is mortgage 4.5 times salary net or gross?
Mortgages calculated at 4.5 times salary in the UK are typically based on gross income, not net. Lenders consider your pre-tax income for their affordability assessments.
Can I get a mortgage 5 times my salary?
Yes, some UK lenders may offer mortgages up to 5 times your salary, especially if you have a strong financial profile and stable income. However, this is not guaranteed.
Can I get 6 times my income for a mortgage?
Obtaining a mortgage 6 times your income is unlikely in the UK unless you are a high income profession like a doctor. Most lenders offer up to 4-5 times your annual income, considering your overall financial health and risk.
Can I get a mortgage 7 times my salary?
Getting a mortgage 7 times your salary is highly unlikely in the UK. Most lenders cap loans at 4-5 times your annual income due to affordability and risk assessments.
What salary do I need for a 400k mortgage UK?
For a £400k mortgage in the UK, you typically need a salary of £80k-£100k, assuming lenders offer 4-5 times your salary. Other factors like debts and credit history also impact this.
How much do I need to earn to get a mortgage of £550,000 UK?
To obtain a £550,000 mortgage in the UK, you likely need an income of £110k-£137.5k, as lenders usually offer 4-5 times your annual income. This varies with your financial situation.
What mortgage can I get with 40k salary UK?
With a £40k salary in the UK, you can generally get a mortgage between £160k and £200k, as lenders typically offer 4-5 times your annual income. This varies by lender and your financial profile.
