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What mortgage can I get on my salary?

Author: Myles Robinson - Expert Finance Advisor

Posted: Jul 13, 2022

What mortgage can I get on my salary?

A common question is how much mortgage can I lend from a mortgage lender on my annual income?

As a mortgage broker we are here to help answer your questions such as how much can I borrow, we act as a mortgage advice bureau that will then introduce you to a mortgage provider who will offer you the best interest rates and mortgage repayments from your annual income.

Although mortgage lenders for residential properties are often based on an income multiple, not all mortgage providers use the exact same household income calculation.

This guide will help you determine how much money you can borrow based on your salary and what the monthly payments could be.

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What is the maximum amount of mortgage you can get based on your salary?

Most mortgage lenders will lend 4 to 4.5 times the borrower’s household income if you meet their affordability criteria. We could sometimes find lenders who will lend up to 5x income.

You might be eligible to borrow up to 6 times the amount of your annual income in exceptional cases. It is possible to find lenders willing to lend at such high levels, but you will likely need the assistance of a specialist mortgage broker.

To get an idea of how much your income will stretch, use our mortgage affordability calculator.

The average UK annual salary is £28.677, according to the Annual Survey Of Hours and Earnings.

This amount may not be representative of all incomes and you might still be eligible for a mortgage.

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How does a joint mortgage work?

Many borrowers are able to apply for a joint mortgage together with a relative, friend, or partner. This means that more income can also be considered when calculating affordability.

If two people apply for a mortgage, and each earns £20,000 per year, the lender will calculate their annual salary to be £40,000. The lender could lend the couple £200,000 if they agreed to loan them 5 times this amount.

What is the maximum amount you can borrow for £12k per year?

Many people with lower incomes think they won’t get accepted for a low-income mortgage. This is often due to misinformation or rejections by lenders in the past.

There are lenders who specialise in mortgages for borrowers with lower incomes.

These mortgages may have higher interest rates. Always speak with yourself, a mortgage broker before you apply. We will have access to many lenders and could be able to offer you a better deal.

The chart below will show you how much money you could borrow based on your income potential and salary.

As you can see, even a little higher salary can make all the difference.

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How much can bad credit impact your ability to earn?

Bad credit can impact the availability of mortgages and the willingness of lenders to lend to your case. You may not be able to get the principal you want (the initial amount of your mortgage) but you might have to pay higher interest rates, which will ultimately cost you more.

To learn more, please visit our guide to mortgages for bad credit.

What is the minimum amount you can earn as an older borrower

Some mortgage lenders limit the maximum age a borrower can reach at application or at the close of the mortgage term. This can be frustrating for older borrowers.

Lenders are worried that you won’t have the ability to pay your mortgage payments once you retire.

Lenders will still consider older borrowers if they can show that their income is sufficient to cover the mortgage term.

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What is the minimum income required to obtain a buy-to-let mortgage?

To apply for a mortgage, some buy-to-let mortgage providers may require that you earn at least £25,000 annually.

However, lenders may also consider the potential rental income that you will earn.

Most lenders expect you to charge 25-45% more for rent than your mortgage repayment. This is because it provides enough income to pay your mortgage and any other unexpected bills or repairs.

How much can I borrow? Talk to an expert today

Each situation is different. Get in touch to get a complete insight into the amount you can borrow for a mortgage using your household income.

Now, relax and let us find the broker who is best suited for your situation. You don’t have to pay anything for an inquiry and you won’t be required to improve your credit rating.

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