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What mortgage can I get on my salary?

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jan 8, 2023

Emma Lunn

Fact Checked By:
Emma Lunn - Finance Editor

What mortgage can I get on my salary?

A common question mortgage brokers are asked is ‘how much mortgage can I borrow from a mortgage lender on my annual income?’

We act as a mortgage advice bureau who will introduce you to a mortgage provider who will offer you the best interest rates and mortgage repayments for 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 probably 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 full-time annual salary is £38,131, according to the Office for National Statistics (2021).

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How does a joint mortgage work?

Many borrowers apply for a joint mortgage together with a partner, relative, or friend. 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 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 talk to 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 borrow?

Bad credit can impact the availability of mortgages and the willingness of lenders to lend to you. You may be able to get a mortgage, but you might have to pay a higher interest rate.

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 be at application or at the end 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 buy-to-let mortgage, some lenders may require that you earn at least £25,000 a year, regardless of how much rent you can achieve for the property.

However, most lenders base affordability on the property’s potential rental income.

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 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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