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Income for £250,000 mortgage

Written By:
Myles Robinson - Expert Finance Advisor

Posted: Jan 8, 2023

Emma Lunn

Fact Checked By:
Emma Lunn - Finance Editor

Income needed for a £250,000 mortgage

As expert mortgage brokers, we often get asked: What are the likely mortgage repayments and what income multiple do I need in order to qualify for a £250,000 mortgage?

While we’ll answer both of these questions in this article, you should keep some things in mind before continuing.

Choosing the right mortgage lenders for a £250,000 mortgage

Every mortgage lender offering a £250,000 mortgage will have different lending criteria. Furthermore, lenders will evaluate your income multiples and annual income along with other factors before deciding what salary is acceptable for a £250,000 mortgage.

Our mortgage brokers are specialists in this field and can provide professional advice for a £250,000 mortgage. This article will provide you with an estimate of the income needed to get a loan for this amount and what you can expect to repay each month.

Use our online mortgage calculator as a guide for your monthly repayments now

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How does your income affect your application for a £250,000 mortgage?

Income is a key consideration for mortgage providers, it can give them an indication of your ability to pay your mortgage.

Lenders also use affordability to calculate your debt/income ratio.

What is the reason that income requirements differ by mortgage lender?

Some lenders are more generous than others. Many lenders place a limit on mortgages at 4.5x your monthly income. However, some lenders will extend loans up to 5x, and a few will even go up to 6x.

What is the minimum income required to obtain a mortgage for £250,000?

How can you calculate the required income to get a £250,000 loan, considering the standard lender caps?

Let’s say you and your partner earn a combined salary of £85,000. Just over 3x, your earnings should equal £255,000. This would theoretically allow you to choose from a variety of mortgage lenders since your income is within the range most lenders will consider.

If you make £45,000 per annum, it would be more difficult to find a provider willing to lend you at least 6x your income.

The mortgage affordability calculator can give you an idea of what this might look like based on your income.

What are the monthly repayments for a £250,000 mortgage loan?

The monthly repayments for a £250,000 mortgage will depend on both the interest rate on the mortgage and the term.

Assuming the interest rate is the same, choosing a longer term will result in lower monthly payments.

We have created some tables to show monthly payments on £250,000 mortgage amounts. Click on one of the tabs to see the different £250,000 mortgage payments. Values for £255,000, £260,000, £265,000 etc. These values are also shown.

For free expert advice and no obligation, if you’re looking for a house or need any help with a £250,000 mortgage, please enquire today.

Other factors besides income can impact your chances of getting approved for a £250,000 loan?

LTV (Loan to Value):

A lower LTV ( higher deposit) may be a benefit as you will have more lenders to choose from and you’ll be able to access better mortgage deals.

A few lenders will want the borrower to have saved at least a 5% deposit (95% LTV). But most want a 10% deposit (9o% LTV) or 20% (80% LTV).

So you might be able to find a lender willing to lend you money for a £250,000 mortgage if you have a £12,500 (5%) deposit – provided that you meet the eligibility criteria.

You will generally get better rates if you have a larger deposit. This gives lenders additional reassurance about your commitment.

Profession

The job you do for a living can impact your ability to obtain mortgage financing. Certain types of jobs and contracts are considered riskier than others.

If you are self-employed and looking for a loan with a temporary contract to finance your home, mortgage companies might be more cautious than someone who has been working full-time for many years.

Many variables can affect your job, so don’t lose heart if you’re in an unusual job.

Negative credit issues

As we have discussed, each mortgage provider has its own eligibility criteria and requirements. The same goes for bad credit.

Some lenders won’t accept someone who has suffered any form of adverse credit. Others will accept the most serious issues such as bankruptcy or repossessions. It all depends on how severe and recent the issue is.

For more information, visit our section on bad credit mortgages. Send us an enquiry and we’ll send you to one of our specialist bad credit advisors for mortgage advice.

Age

Older customers might have a more difficult time getting a mortgage because they are considered riskier. Some lenders have a maximum age you can be at the end of the mortgage term. If you have retired, some providers won’t lend to you.

A whole market broker can help you find more mortgage providers that are willing to consider you regardless of your age. Visit our later life lending section here.

Buying a £250,000 buy-to-let (BTL) property

The rules for BTL investments are different from standard residential mortgage products.

Lenders will usually require a higher deposit (usually a minimum of 25%). This means you’d need a deposit of £62,500 to buy a property worth £250,000.

The affordability calculation is not based on income multipliers but on your expected rental income from the property.

Second homes

There are different rules if you are looking for a mortgage to purchase a second home.

The majority of banks and building societies will require a larger deposit for a second home. You may also be subject to more stringent affordability checks than with a standard loan.

This is because if you find yourself in financial trouble, you are more likely to prioritise mortgage repayments for your primary residence over those for a second.

Unique property types

Many mortgage lenders are reluctant to lend for properties that are not standard properties. You might find it more difficult to get a mortgage for a flat in a high-rise block or one made out of non-standard materials.

Some lenders will consider more types of property. Learn more in our non-standard property section. Speak with a mortgage broker today for mortgage advice.

You should talk to a broker about mortgage repayments

More than 120,000 people have found the right mortgage for them, even with bad credit. We are rated 5 stars. This is largely due to our high level of service as well as access to experienced brokers who have:

  • Expertise in dealing with a £250,000 mortgage
  • Established a working relationship with all lenders
  • Become OMA-accredited
  • Completed the 12-module approved LIBF training course

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You can call today to discuss any topic or submit an enquiry.

Contact us today and let us find the right broker for you. There is no charge and no obligation to improve your credit rating.