How much can I borrow for a mortgage?
The usual income multiples, what lenders check and how to prepare.
The short answer
Most lenders will offer around four to four and a half times your yearly income, and some will go higher for certain borrowers. So someone earning £40,000 might borrow roughly £160,000 to £180,000. The exact figure depends on your outgoings, your debts, your deposit and the lender's own affordability checks.
What lenders look at
- Income: salary, and sometimes regular bonuses, overtime or self-employed profits averaged over two or three years.
- Outgoings: bills, childcare, loan and credit card payments, and car finance. These reduce what you can borrow.
- Deposit: a bigger deposit means a lower loan-to-value and usually a lower rate.
- Credit history: missed payments and a high amount of existing credit make a lender more cautious.
- Stress test: lenders check you could still pay if rates were higher than today.
Joint applications
With two people, lenders add the incomes together. Two people earning £30,000 and £25,000 have £55,000 between them, which at four to four and a half times is roughly £220,000 to £247,500. Each person's debts count too.
What to do next
- Use the mortgage calculator to see the monthly payment at different rates.
- Add the other costs of buying, see first-time buyer costs and the stamp duty calculator.
- Check your credit report and pay down small debts before you apply.
- Speak to a mortgage broker, who can see which lenders would accept your circumstances. Do not rely on a rule of thumb.
Where to learn more
This guide gives rules of thumb for information only and is not mortgage advice. A mortgage broker or adviser can recommend what suits you.