5 times salary mortgage lenders, rates to expect and how to get approved quickly
While most mortgage lenders limit lending at 4.5 times a borrower’s salary, some lenders on the mortgage market will approve mortgages at higher income multiples, such as 5 x salary mortgages.
We can get you approved quickly for a 5 times mortgage, start below now:
This guide will explain what a 5x mortgage is, how to apply for a 5x salary mortgage and where to find lenders who offer them.
Mortgage applicants often approach us after encountering mortgage lenders that are reluctant to lend anything beyond 4-4.5x.
Some lenders will offer mortgages of up to 6 times your income, depending on your circumstances.
This article is about 5x income mortgages. Use our mortgage calculator below:
Is it possible to get a mortgage with 5 times your salary?
Yes, although most mortgage lenders limit the amount you can borrow to 4.5 times your annual income, there are a few mortgage providers who will lend up to five times your salary.
It can be difficult to find these lenders, so it is best to use a mortgage broker. Brokers are able to access the entire market and know which lenders will provide x5-salary mortgages.
Our network’s mortgage advisors have strong working relationships with lenders and are often able to negotiate exclusive deals.
Once you have found a lender willing to lend more than the average income, qualifying for a mortgage of five times your income is possible.
Lenders that offer mortgages on the basis of higher-income multiples prefer to do so in low-risk situations. They’ll calculate the risk involved using the following factors.
- Your deposit. The higher the deposit, the more you’ll be able to borrow.
- Your income and employment. Most lenders prefer customers with large PAYE wages. It’s possible to obtain a five-times-salary mortgage if you make money from self-employment or a variable income such as bonuses or shareholder dividends. A broker who specialises in self-employed mortgages will be able to find these deals for you.
- Your affordability. Having substantial outgoings can affect the amount of money you are able to borrow.
- Your credit score. Poor credit history can make it less likely that lenders will offer you a mortgage at 5x your salary. A broker who specialises in mortgages with bad credit may be able to help you.
- The property type. While lenders prefer brick-and-mortar homes, some specialists will lend to non-standard properties and unusual buildings.
Why is it more challenging to obtain a mortgage with a 5x income?
Most UK mortgage lenders limit their lending to 4 to 4.5 times the borrower’s income as standard.
This is because the Bank of England has set restrictions that prevent mortgage providers from holding more than 15% of their mortgages at greater than 4.5x.
Lenders try to avoid higher income multiple loans because they are riskier.
If you don’t understand the mortgage market, it can be hard to find lenders willing to lend mortgages on incomes greater than 4.5 times.
It tends to be specialist lenders and challenger banks that will offer mortgages of more than 4.5 times a borrower’s income.
To determine the maximum amount of money they can lend you, mortgage lenders often use income multipliers.
An income multiple is an amount based on your annual salary. For example, if you had a gross salary of £30,000 and your lender employed an income multiple 5, you could borrow £150,000.
However, lenders are cautious about lending too much money relative to income. Some have stricter lending criteria if you are borrowing a high salary multiple.
Before you take out a mortgage at 5x your income, it’s important to work out if you can afford to pay it back.
Our network has brokers who specialise in 5x income mortgages and know which lenders will accept them and under what circumstances.
Mortgage calculator for 5 times your salary
An online mortgage affordability calculator will help you determine how much money you can borrow from mortgage lenders who lend on the basis of 5x your income (or other standard income multiples).
Use the below calculator to see what you can lend:
Is it possible to get a mortgage on a salary that is more than five times your monthly income?
Yes, a few mortgage lenders will go higher. Some mortgage lenders will lend up to 5.5 or 6 times the salary, and each of these income multiples are covered in separate articles.
For more information, see our guide to 5.5-times salary mortgages or our article about 6-times salary mortgages.
What does a 5 x salary mortgage look like if I want to get a joint mortgage?
Assume that person 1 makes £30,000 per year while person 2 earns £20,000. The maximum amount a single applicant can borrow to get a mortgage for 5x their salary is £150,000. The combined mortgage amount increases to £250,000 if you add applicant 2.
A combination of two incomes can offer more security, which can benefit lenders who see it as a lower risk. If one borrower loses their job, the income from the other borrower can help support the household’s finances and possibly cover the mortgage.
What amount of deposit is required for a mortgage with a 5-times income?
The type of mortgage product that you are applying for will determine how much deposit you will need.
The deposit requirements for residential mortgages are typically lower than those required for buy-to-let mortgages, which pose a greater risk for a lender.
The borrower’s income determines the amount you can borrow on a residential mortgage, whereas the repayments for a buy-to-let loan are dependent on how much the property can be rented out for.
A deposit of at least 5% of the property price is required if you are a residential buyer. However, some mortgage products require a 10% deposit (max LTV of 90%).
A higher deposit can give you access to lower interest rates. Sometimes, saving a bit more might be worthwhile to make your mortgage payment less.
It may be possible to obtain a mortgage at 5x your salary with a deposit of 5%, whether you have a property to sell quickly or are looking to move.
You will need to have a clean credit history and be able to afford the amount of the mortgage you are applying for.
Can I get a 100% loan to pay for a mortgage with a 5x monthly salary?
In the past, mortgage lenders offered mortgages for 100% of a property’s purchase price, but they no longer offer these deals. Guarantor mortgages may be an option if you have difficulty raising a deposit.
This type of mortgage can allow you to buy a home with a very low deposit. To provide security for the loan, you will need a guarantor who has either sufficient savings or owns a residential property.
Higher-income loans are riskier, and lenders will not always approve them.
Your guarantor might need to hold 5-20% of the property’s value in a savings account until your mortgage is paid off.
Some people also ask their guarantors to pledge a portion of the equity in their home as security for the mortgage, but this is risky because your guarantor could be held liable if you fail to make payments.
In the worst case, their home might be taken away to pay their mortgage balance.
Can I get a mortgage for 5x my salary if I have credit problems?
Although it’s possible, severe debts and recent bankruptcy can limit your options. Some lenders may refuse to lend to borrowers who have bad credit.
However, there are UK lenders who will offer mortgages even if you have bad credit or missed payments. Some will even lend to you if you have been made bankrupt in the past.
You might need to have a higher deposit or meet a certain income threshold to be eligible for a 5x mortgage lender with bad credit.
You should avoid submitting mortgage applications before you speak to a broker. Declined applications can further impact your credit score and are something you want to avoid.
If I’m an older borrower, can I get a mortgage that is five times my income?
Most lenders set a maximum age the borrower can be at the end of the mortgage term. This is usually 70 or older.
Lenders do this to lower their risk of losing money, as most people see a decrease in their income after retirement. You are more likely to have health problems preventing you from working or paying your monthly repayments.
Your lender might ask you questions about your ability to repay your loan even if you are no longer working. It may be that your savings or pension are enough to pay your mortgage.
Payslips, bank statements and savings statements will be required to prove your income. You can also include your state pension in the affordability assessment to get a mortgage.
You might want to look into an interest-only mortgage if you are nearing retirement.
Are self-employed borrowers allowed to use a 5x multiple on their income?
If you are self-employed, such as a freelancer, contractor or director of a limited company, you might still be able to get a 5x income mortgage.
If you have at least one year’s worth of bank accounts and meet your lender’s criteria, you should be able to obtain a mortgage with a 5x salary.
You might find your options of lenders are smaller if you have been trading for less than a year. The rates may not be as competitive if you do so, but this will depend on other factors, such as your credit history.
A minimum of two years’ worth of accounts will give lenders more information about your trading history and ability to generate steady income.
Some mortgages are only available through intermediaries, such as a mortgage brokers.
We can get you approved for a 5x income mortgage quick
It can be hard to find mortgages based on 5x your annual income.
Our mortgage advisors specialise in five-times-salary loans and strong working relationships with lenders.
Talking to an advisor before applying for a mortgage will ensure you find the best lender and increase your chances of getting a favourable interest rate.
Start your application below now online: