5 times salary mortgage lenders and rates you can expect
While most mortgage lenders limit lending to people earning less than 4.5x, there are still lenders on the mortgage market that will approve mortgages for higher incomes.
Professionals are those who have excellent credit and high income, as a mortgage broker, we have specialist lenders for you.
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 they’ve encountered mortgage lenders that are reluctant to lend anything beyond 4-4.5x.
A 5 income multiplier is considered higher than 3 to 4. Most mortgage lenders will offer lower multiples of 3-4.5. However, there are some lenders who will extend 6 or more depending on your lending criteria.
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 on the basis of 4.5 times your annual income, there are still a few mortgage providers who will lend up to five times your salary.
It can be difficult to find these lenders, so it is recommended to use a mortgage broker. They 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, it is possible to qualify for a mortgage of five times your income.
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.
- The amount of your deposit: The higher the deposit, the more you can afford.
- 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 variable income like bonuses or draw dividends from the company. However, professional advice from a broker who specialises in self-employed mortgages would be a good idea.
- Your affordability. Having substantial outgoings can have an impact on the amount of money you are able to borrow.
- Your credit score A history of poor credit can make it less likely that lenders will offer you a mortgage at 5x your salary. A broker who specializes in mortgages with bad credit may be able to help you.
- The property type can help you determine if a lender will consider making an offer. While brick and mortar homes are preferred by lenders, there are specialists who will lend to non-standard properties and unusual buildings.
Why is it more difficult to obtain a mortgage with 5x income?
Most UK mortgage lenders limit their lending to 44.5 times the income.
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 have a deep understanding of the market, it can be hard to find lenders willing to lend mortgages on incomes greater than 4.5 times.
While some are traditional mortgage providers, many of them offer mortgages based on more than 4.5 times income. However, specialist lenders and challenger banks are often the ones offering the best rates for these mortgage products.
To determine the maximum amount of money they can lend to you, mortgage lenders will 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. Therefore, don’t be surprised if there are stricter lending criteria for mortgage agreements that include multiples of high-income borrowers.
These lenders are available and could help you buy larger and more expensive properties. However, like any mortgage product there are some things you should consider. The most important is whether you have the financial means to pay that amount.
The good news is that our network has brokers who specialize in five-times income mortgages and know which lenders will accept them 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 your five times (or other standard income multiples). It’s worth a shot to see how it might work for you.
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 6 times the salary, while others will extend their lending to as high as 5.5 times the salary. 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 5x multiple incomes look like if I want to get a joint mortgage?
A joint mortgage application can increase your borrowing power. Both incomes can be added to the mortgage application. This can result in a larger loan.
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 be a benefit to lenders who may view your risk as lower. 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 commercial mortgages. Buy-to-Let Mortgages These pose greater risk for a lender.
The income of the borrower is what determines the repayment of a residential mortgage, whereas the repayments for a buy-to-let loan are dependent on the ability of the borrower to find tenants to rent.
A 5% deposit is required if you are a residential buyer. However, some lenders may require 10% to ensure that your loan-to value rate is 90%.
A higher deposit can allow you to access lower interest rates. In some cases, it might be worthwhile to save a bit more 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 just 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?
However, 100% mortgages are not available. Guarantor mortgages may be an option if you have difficulty raising a deposit.
This type of mortgage can allow you to purchase a property with a lender with zero cash deposit too.To provide security for the loan you will need a guarantor who has either residential or savings property.
Higher-income loans are riskier and lenders will not approve them. Your guarantor might need to hold between 5-20% and 5% of the property’s actual 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.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 your 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.
There are UK lenders who will offer mortgages even if you have bad credit or missed payments. Many of borrowers are concerned about bankruptcy. However, we also know that there are niche lenders who can provide loans in these situations.
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. However, this may not always be true.
Talk to a mortgage broker about your situation. You should avoid submitting mortgage applications before you submit any rejections. This can further impact your credit score and is something that you want to avoid.
If I’m an older borrower, can I get a mortgage that is five times my income?
Some mortgage lenders have such a system for older borrowers. Limits on lending age are in place, usually ranging between 70 and 85, but this won’t always be the case with every lender.
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 that can prevent you from 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 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?
A common misconception is that workers who get their income from the government are not entitled to it. self-employment. Although it is true that large mortgages are not possible, this is often false.
If you have at least one year’s worth of bank accounts and meet the criteria of your lender, 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 is going to 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, which is why it is preferred by many UK banks.
You may be able to get a mortgage up to 5x your annual income, regardless of whether you are a contractor. Freelancer or as a limited company owner.
Some deals are only available through intermediaries, such as a mortgage broker or mortgage broker, self-employed mortgage providers may not be immediately visible to consumers searching online.
Talk to a mortgage expert right away
It can be hard to find mortgages that are based on five times your annual income. A specialist broker who is experienced in all aspects of the market is highly recommended as most mortgage lenders won’t accept a salary more than this.
Our network has advisors who specialise in five-times-salary loans and have 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.