'How much can I borrow for a mortgage?' - Mortgage Squared

‘How much can I borrow for a mortgage?’

One of the first tasks house buyers will face is understanding how much they can borrow from a mortgage lender.

In recent years, borrowers have traditionally been able to get a loan of up to 4.5 times their income from a high street bank. In some cases more if they have a high income and existing wealth.

There are also options beyond the major banks as some specialist providers have started offering up to 6 times salary.

The traditional rule of thumb when it comes to how much you can borrow is 4 to 4.5 times your income. Some lenders will go higher for a client with a clean credit history, consistent  income, and minimal expenditure.

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Borrowers should be aware that they must also meet strict affordability tests in order to take out a loan.

A squeaky clean credit score doesn’t always mean that you can get a large mortgage loan. On the flip side, a low credit score doesn’t mean you are out of the running all together.

Income multiples still underpin mortgage underwriting but maximum multiples only apply if the applicant can satisfy many other factors such as verifiable and consistent income and a clean credit score. It is calculated on a multitude of contributing factors.

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Banks now consider all your outgoings, such as outstanding loans, credit card debt and day-to-day spending, as part of the application process. If you have children, the cost of raising them will also be taken into account.

Couples are able to borrow more by combining their annual earnings and sharing the cost of their spending.

Looking at your options take a look at our borrowing calculator


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