If you have seen a property worth £350,000 (or thereabouts), you will understandably want to know more about your mortgage chances.
Are you earning enough to afford the monthly repayments? Will mortgage lenders accept your income for this size mortgage?
Let’s take a closer look.
What do you need to qualify for a £350,000 mortgage?
To qualify for a £350,000 mortgage, you need to have sufficient income for a mortgage of this size and enough money saved up for the mortgage deposit.
Here are a few things that lenders will typically consider when evaluating your application for a mortgage of this size:
1) Income
You will need to have sufficient income to support the mortgage payments. This will typically include your salary, bonuses, and other sources of income. Some lenders may also consider your employment history and stability when evaluating your application.
2) Credit history
Lenders will typically review your credit history to get an idea of your past credit behaviour. A good credit score can help you qualify for a mortgage with a lower interest rate.
3) Debt-to-income ratio
This is a measure of how much of your income is going towards paying off debts, including credit card balances and other loans. Lenders generally prefer to see a debt-to-income ratio of 36% or lower.
4) Deposit
You will typically need to make a down payment of at least 5% of the purchase price of the home. For a £350,000 mortgage, this means you will need to have at least £17,500 saved up for a down payment.
5) Other factors
Lenders may also consider other factors when evaluating your mortgage application, such as your age, the type of property you are purchasing, and the location of the property.
It is worth noting that these are just general guidelines, and actual mortgage requirements can vary depending on the lender and the specific mortgage product you are applying for.
In the meantime, the mortgage affordability calculator below can give you an indication of whether your income stretches far enough for a £350,000 mortgage loan.
How mortgage lenders will calculate affordability
Lenders carry out affordability checks before lending their customers money. They each have their own methods of calculating mortgage affordability, but generally speaking, the following indicators are taken into account.
- Annual income. You need to be earning enough money to cover your monthly mortgage repayments so your income is one of the biggest factors in determining your affordability for a mortgage.
- Source of income. Most of your declarable income will come from your main job but you might be able to use income from other sources to improve your affordability. This could include investment income, child maintenance payments, rental income, or income from benefits. It’s important to note that not all lenders accept every kind of income type so it’s wise to speak to a broker such as ourselves when searching for a lender that is right for your situation.
- Type of employment. Your application will be assessed differently, depending on whether you’re employed or self-employed. Not only will the level of income you earn be taken into account but the stability of your employment will also be considered.
- Outgoings. You might earn enough money for a £350,000 mortgage but if your outgoings could affect your ability to make each monthly repayment, you may be turned down for a mortgage. Outgoings can include bill payments, debt payments, membership fees, subscriptions, and money spent on your regular shopping trips. It’s wise to reduce your outgoings before applying for a mortgage if you think your affordability could be put into doubt.
What else can affect your eligibility for a mortgage?
When assessing your affordability for a £350,000 mortgage, lenders will consider more than your affordability. The following will also be taken into account when they review your application.
- Your credit history. You won’t necessarily be ruled out of a mortgage if you have bad credit but the issues on your credit report could limit the number of lenders and deals you have access to. You may also have to opt for a mortgage with a lower loan-to-value (LTV) so you will need to stump up the cash for a higher deposit. If you do have a poor credit history, you should take steps to improve your credit rating as you will have more lenders to choose from and access to higher loan-to-value deals.
- Age. For most lenders, the maximum age a borrower should be at the end of their loan term is 70, so if you are likely to be older than this at the end of your term, your mortgage options may be limited. Our experts know which mortgage lenders offer mortgages to older borrowers so get in touch with us for further details. – Read our guide on What is the maximum age for a mortgage?
- Profession. Higher-income multiples are usually reserved for those in high-paid professions, such as lawyers and doctors. This is because people in these professions pose less of a risk to lenders. You might still be eligible for a higher income multiple if you’re in an average-salary profession with additional income. Speak to a member of our experienced team for the right mortgage advice. – Read our guide on Mortgages for Professionals
Mortgage Affordability Calculator
Find out how much you could potentially borrow from a mortgage lender using our mortgage affordability calculator.
Enter your household income and let the mortgage calculator assess your affordability based on the standard income multiples used by most lenders.
How much deposit will you need?
The amount you need for a mortgage deposit will depend on the lender.
Most lenders require a deposit of at least 10% of the property price, so in the case of a property worth £350,000, you would need a deposit of at least £35,000.
If you can afford to pay more, you may be eligible for better mortgage deals with more affordable interest rates and lower monthly repayments, so it’s worth saving up for a bigger deposit if you can.
If you are struggling to raise the funds for a deposit of at least 10%, you may be able to get a mortgage with a 5% deposit. In this scenario, your deposit would be £17,5000.
Not many lenders are offering 5% mortgages at the moment but if this is an option you would like to explore, speak to us and we will source the right lender for you.
Read our guide on: How much deposit do I need to buy a house?
Income requirements
Most mortgage lenders use income multiples when determining the maximum amount they are willing to offer a borrower.
Typically, providers will lend 4.5 times the annual salary of the applicant(s) but in the right circumstances, they may lend up to 5 or 6 times the salary.
For lenders that use an income multiple of 4.5, your annual salary would need to be around £78,000 if you’re hoping to get a mortgage worth £350,000.
For a lender that used an income multiple of 5, you would need to be earning around £70,000.
We appreciate that these are sizeable amounts but if you’re making a joint mortgage application, the combined earnings of both applicants would be taken into account. As such, your earnings could be significantly less if the joint applicant increased your borrowing capacity.
Read our guide on: Proof of income for mortgage
Example calculations
To find out your borrowing potential based on 4.5, 5, and sometimes 6 times a salary, check the table below. If you are making a joint application, remember to factor in the other person’s salary too.
| Salary | 4.5 times | 5 times |
|---|---|---|
| £50,000 | £225,000 | £250,000 |
| £55,000 | £247,500 | £275,000 |
| £60,000 | £270,000 | £300,000 |
| £65,000 | £292,500 | £325,000 |
| £70,000 | £315,000 | £350,000 |
| £75,000 | £337,500 | £375,000 |
| £80,000 | £360,000 | £400,000 |
Please note: The table above is for guidance only. The actual amount you will be able to borrow will depend on a range of other factors, above and beyond how much income you earn, so speak to a mortgage broker at YesCanDo for tailored advice.
We will let how much you could borrow based on all the factors that lenders tend to take into consideration when assessing affordability. We will also let you know about any government schemes you may be eligible for if you’re struggling to raise money for a deposit.
How much your mortgage repayments could be
The mortgage repayments on your £350,000 mortgage will depend on the agreed mortgage term agreed, the interest rate on your loan, and the type of mortgage you choose.
Read about The Different Types of Mortgages here.
Mortgage term
The longer the loan term is, the lower your monthly mortgage payment will be, so this is something to take into consideration before applying for a mortgage.
Mortgage terms are typically 25 years but some lenders are happy to extend the borrowing period up to 35-40 years.
If you want to pay off your mortgage sooner, you can opt for a shorter loan term. But as your monthly payments will be increased, you need to make sure you are earning enough to cover the higher payments. Your mortgage lender will also look at your annual income and if they don’t think you will be able to afford the repayments, your application will be rejected.
Interest rates
Typically, interest rates are between 1.5% and 6%. Rates were at a historic low in 2021, however, they have now increased several times since.
More on rates here: Will mortgage rates go down or up in 2023?
If you’re able to make a larger deposit, you may be offered a mortgage with lower interest. But if you are a ‘risky borrower,’ perhaps because you have bad credit due to too many other debts, you may have to pay more interest on your loan.
Your interest repayment will also depend on the type of mortgage you opt for and the lender you choose.
The mortgage brokers at YesCanDo can help you find mortgages with the lowest interest rate, so get in touch with us if you would like to know more.
Mortgage Repayment Calculator
To get an idea of how much your monthly mortgage payment might be based on different loan amounts, mortgage terms, and mortgage rates, use the mortgage calculator below.
Work out your monthly repayments for a £350,000 mortgage
Example mortgage repayments
For further examples of what your repayments could be on a £350,000 mortgage, based on rates and term length, use the table below as a guide.
| 2% | 3% | 4% | 5% | |
|---|---|---|---|---|
| 20 years | £1,771 | £1,941 | £2,121 | £2,310 |
| 25 years | £1,483 | £1,660 | £1,847 | £2,046 |
| 30 years | £1,294 | £1,476 | £1,671 | £1,879 |
| 35 years | £1,159 | £1,347 | £1,550 | £1,766 |
Interest only as an option
You can reduce your monthly repayments by taking out an interest-only mortgage. With this option, you pay off the interest element of the mortgage each month and not the loan capital.
Mortgage providers will usually expect you to make a higher deposit if you choose this option but as your monthly mortgage payments will be less, this type of mortgage could be more affordable for you.
Lenders will expect you to have a repayment vehicle in place; i.e a method for paying off the loan capital at the end of the mortgage term. If you get to the end of the term and you can’t pay the capital, you may need to sell your home to repay it.
Should you consider an interest-only mortgage? These types of mortgages are typically offered to buy-to-let customers who want to make money from a rental income but if you’re a residential customer, you may still be eligible for a mortgage on an interest-only basis.
Read our guide on interest-only mortgages to learn more and get in touch with our team if you would like to explore this option further.
How a broker can help you get a mortgage for this amount
To improve your chances of getting a £350,000 mortgage, speak to an expert broker at YesCanDo Money. They will take a look at your monthly income and assess whether you can afford a mortgage of this size or not.
If you can’t afford a £350,000 mortgage, your appointed advisor will explore other options with you.
If you can afford this size mortgage, your appointed broker will…
- Compare UK mortgage lenders across the market to find you the best mortgage deal
- Improve your affordability by finding lenders that are willing to offer you a lower interest rate and more than 4.5 times your salary
- Give you advice on the steps you can take to improve your affordability
- Search the market for specialist lenders if you are likely to get turned down by certain other lenders, perhaps because you’re self-employed or because you have bad credit
Get in touch with a mortgage broker for your £350,000 mortgage
Will you meet lender criteria for a £350,000 mortgage? To find out more, get in touch with our team of mortgage brokers today. Whether you’re a first-time buyer, home mover, remortgager, or somebody looking to buy an investment property, we can help you find the mortgage lenders that are right for your situation.
We work with the mortgage lender to increase your chances of mortgage success
We will give you tailored advice to improve mortgage eligibility and to increase your chances of getting a mortgage with the lowest interest rate. We will also let you know how much you may be able to borrow with the help of mortgage calculators. After finding the most suitable lender for your needs with the lowest interest rate, we will then support you with every aspect of your mortgage application.
We will do all this and more FOR FREE, so get in touch with our friendly and experienced team via WhatsApp, phone, or by using our contact form below.
Related Guides
Below are other related guides that will be helpful for you to read.
- How many times my salary can I borrow for a mortgage?
- How long does a mortgage application take?
- How to prepare for a mortgage application
- The Income Required for Mortgage Approval
