How many times my salary can I borrow for a mortgage?
Most lenders calculate how much they're willing to lend you by using a multiple of your income
The income multiple lenders offer you depends on your overall individual circumstances - so your affordability will be looked at as a whole, rather than just your earnings
With that in mind, let’s take a look at how much you may be able to borrow on your current income, depending on the multiple offered:
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What is the borrowing multiplier for mortgages?
The borrowing multiplier is the number a lender will multiply your salary by to determine your mortgage loan size. This is often referred to as the loan-to-income ratio (LTI), which simply means how many times your income your loan is.
While the average mortgage loan multiplier is around 4.5, some lenders have higher or lower maximum LTI. Most have a minimum income threshold for each income multiple. So a lender may offer 4.9 LTI if you earn below £40k and 5.5 LTI if you earn above it, for example
However, some lenders decide the loan amount on a case-by-case basis and don’t quote any maximum LTI. This is usually more specialist and niche lenders, rather than those on the high street.
What impacts the mortgage multiplier you're offered?
It’s important to note that lenders also take your broader circumstances into account when they assess how much you can borrow. So, for example, two separate applicants on £40k may be offered different loan sizes if one has a more risky credit history than the other, is buying a higher risk property, or is borrowing at a higher LTV (loan to value ratio).
As well as the size of your salary, your employment type can also have an impact on the income multiple offered to you. Certain professionals and those with a very high salary or substantial assets (high net worth individuals) are typically offered a higher multiple of their income. Some lenders also increase the LTI for those in key worker roles.
The location of the property can also impact the mortgage multiplier that you’re offered. We analysed the average salary and house prices in 80 cities in the UK. This then revealed the average mortgage-to-salary ratio, which Bath requires the highest ratio and Middlesborough requires the least.
At the other end of the scale, not everyone will be offered as much as 4.5 times their earnings. Some lenders offer a lower maximum LTI generally, but particularly to higher risk borrowers, such as those with poor credit, or who have recently started self-employment.
What is the mortgage multiplier for couples and joint mortgages?
If you take out a joint mortgage, lenders often use a slightly lower income multiplier for a combined income compared to what they would offer a single applicant. Each lender has their own rules, but not all of them combine the income of joint applicants in their calculation. Some might offer 4.5 x the highest earner’s salary + the lower earner’s salary, for example.
There are also lenders willing to consider more than 2 applicants on a single mortgage application, but most (not all) will only use the income of the 2 highest earners in their calculation in this case.
Please note: These tables are for illustration purposes only and the actual size of loan you are offered will be based on a wide range of factors including your income, outgoings, career type and level, credit rating, property type and deposit size
How much could I borrow on £20-28k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£20,000 | £90,000 | £100,000 | £120,000 |
£22,000 | £99,000 | £110,000 | £132,000 |
£24,000 | £108,000 | £120,000 | £144,000 |
£26,000 | £117,000 | £130,000 | £156,000 |
£28,000 | £126,000 | £140,000 | £168,000 |
How much could I borrow on £30-38k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£30,000 | £135,000 | £150,000 | £180,000 |
£32,000 | £144,000 | £160,000 | £192,000 |
£34,000 | £153,000 | £170,000 | £204,000 |
£36,000 | £162,000 | £180,000 | £216,000 |
£38,000 | £171,000 | £190,000 | £228,000 |
How much could I borrow on £40-48k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£40,000 | £180,000 | £200,000 | £240,000 |
£42,000 | £189,000 | £210,000 | £252,000 |
£44,000 | £198,000 | £220,000 | £264,000 |
£46,000 | £207,000 | £230,000 | £276,000 |
£48,000 | £216,000 | £240,000 | £288,000 |
How much could I borrow on £50-58k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£50,000 | £225,000 | £250,000 | £300,000 |
£52,000 | £234,000 | £260,000 | £312,000 |
£44,000 | £198,000 | £220,000 | £264,000 |
£54,000 | £243,000 | £270,000 | £324,000 |
£56,000 | £252,000 | £280,000 | £336,000 |
£58,000 | £261,000 | £290,000 | £348,000 |
How much could I borrow on £60-£100k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£60,000 | £270,000 | £300,000 | £360,000 |
£65,000 | £292,500 | £325,000 | £390,000 |
£70,000 | £315,000 | £350,000 | £420,000 |
£75,000 | £337,500 | £375,000 | £450,000 |
£80,000 | £360,000 | £400,000 | £480,000 |
£85,000 | £382,500 | £425,000 | £510,000 |
£90,000 | £405,000 | £450,000 | £540,000 |
£95,000 | £427,500 | £475,000 | £570,000 |
How much could I borrow on £100-£200k a year?
Salary | 4.5 Times Income | 5 Times Income | 6 Times Income |
£100,000 | £450,000 | £500,000 | £600,000 |
£110,000 | £495,000 | £550,000 | £660,000 |
£115,000 | £517,500 | £575,000 | £690,000 |
£120,000 | £540,000 | £600,000 | £720,000 |
£130,000 | £585,000 | £650,000 | £780,000 |
£140,000 | £630,000 | £700,000 | £840,000 |
£150,000 | £675,000 | £750,000 | £900,000 |
£200,000 | £900,000 | £1,000,000 | £1,200,000 |
How to make the most of your income when applying for a mortgage
There is some degree of variance in the types of income each lender is willing to accept. This means that it can be helpful for those applicants with a more complex income to speak to an online mortgage broker like Mojo. Due to advanced knowledge of lender criteria, our mortgage experts will be able to recommend the lender that is most appropriate for your income type(s).
Some lenders will add any overtime payments, commission and bonus income alongside salary. Some will only consider a percentage of some or all of these types of additional income, and others won’t consider them in their calculations at all.
There are also an increasing number of lenders willing to consider certain benefits alongside earned income, particularly those that are paid for a long term, such as child benefit. Finding a lender that will make the most of your diverse income is a great way to maximise your borrowing potential, so ensure you mention all of your income sources when speaking to our team.
FAQs
While some lenders do have a minimum income limit for taking out a mortgage with them, it’s fairly rare. However, the amount you need to take out a mortgage large enough to buy a home is more about whether you can afford the repayments on the loan size required, rather than your actual salary level.
So, for example, the lender’s minimum income requirement could be £20,000, but if you need to borrow £150,000 to buy a property, then it’s fairly unlikely you could afford to individually.
It's important that you are personally comfortable with the size of your mortgage payments, as well as meeting the lender's affordability requirements. Don't forget, you'll be repaying it for a long time - the average mortgage term in the UK is now around 30 years.
It’s also important to remember that taking on a home comes with a whole host of costs other than the mortgage repayments, from utility bills and insurance to maintenance and decor expenses.
While this is a personal decision, it’s best not to overstretch yourself. It’s always a good idea to have an emergency fund to account for unexpected repair costs.
It’s also important to consider that your personal circumstances could change, or that your interest rates could increase in the future. Even if you take a fixed-rate deal, rates could be higher when your deal ends and you come to remortgage.
It can also be beneficial to leave yourself the flexibility to overpay when possible, as this can reduce your overall mortgage term and the total interest you end up repaying.