How much can I borrow for a mortgage? (UK)

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Fact Checked.
Updated on
November 29, 2022

In a nutshell

As a rule of thumb, lenders will let you borrow roughly 4.5 x your yearly income for a mortgage (before tax). However, the exact figure will depend on lots of factors, including your expenses, the size of your deposit and even your job.

Nutty

Saving and scrimping to be able to buy your dream home? Wondering how much you could actually borrow? You’re in the right place!

Here, we’ll show you how to work out roughly what you can borrow for a mortgage. And we’ll reveal what mortgage lenders will look at when they’re deciding how big a mortgage to give you (lenders are the people that give out mortgages). Enjoy!

How much can I borrow for a mortgage?

First things first, every lender is different. So, they’ll each have their own unique criteria for deciding how much they’ll be willing to let you borrow.

However, as a general rule of thumb, lenders will let you borrow roughly 4.5 x your income (before tax). That means to work out roughly how big a mortgage you can get, you can take your yearly income and multiply it by 4.5.

How much can I borrow for a mortgage?

Let’s look at an example. Say you earn £24,000 per year. That means that, on your own, you can probably borrow around £108,000 (24,000 x 4.5 = 108,000). 

Now let’s say you’re teaming up with someone else to get a joint mortgage (that’s where you buy a home with at least one other person, normally your partner). If you earn £24,000 per year and they also earn £24,000 per year, you’ll probably be able to borrow around £216,000. That’s because between you, you’re earning £48,000 (and 48,000 x 4.5 = 216,000). Simple!

How much can we borrow for a mortgage?

Of course, lenders will do lots of other checks besides just looking at your salary and the exact amount you can borrow will depend on your personal circumstances. To get a clear idea of exactly how much you could borrow, you’re best off chatting to a whole-of-market mortgage broker (also known as a mortgage advisor).

They’ll take the time to understand your personal circumstances and will be able to compare all the different types of mortgages, mortgage deals and mortgage lenders out there, to see how much you could borrow for your mortgage (and to find you the best deals!).

Mortgage brokers and advisors

If you're not sure where to find one, check out Habito¹ – a free, online mortgage broker, with great service. Or, if you prefer to speak to an advisor, check out Tembo¹, you could be chatting with an expert in just 10 minutes.

Use a mortgage calculator

If you’re just looking for a quick indication of how much you can borrow, you can use a mortgage calculator. Our favourite one is Tembo’s mortgage calculator¹ – it’s super fast, and will show you options to borrow even more.

Habito mortgage borrowing calculator

It will even then show you which mortgages you might be able to get and the monthly mortgage payments and interest rate. It’s pretty cool. And free. (Habito¹ is a great online mortgage broker and is completely fee free.)

Mortgage calculators will just give you a rough idea about how much you can borrow. There is a bit more to it, and each mortgage lender can be a bit different when it comes to their borrowing criteria (technically called an affordability assessment). Let’s run through what could impact your mortgage borrowing.

What impacts how much I could borrow for a mortgage?

Okay, so you know how we said that it’s not quite as simple as just multiplying your salary by 4.5? Well, most lenders will look at some key areas besides your income when they’re deciding how much they’re happy to lend you. Here are the main ones.

Affordability

Affordability is all about how much a lender thinks you’re going to be able to afford each month in repayments. Think about it: if you were lending someone money, you’d want to find out whether they had a decent chance of being able to pay it back – right?

Mortgage – Affordability

Well, lenders are the same. They want to make sure that you’re going to be able to afford to keep up with the repayments before they agree to give you a mortgage.

This is where those checks on your salary come in. In general, they won’t want you to borrow more than around 4.5 x your income because any more than this and you might not be earning enough to keep up with the repayments.

However, they’ll also look at your expenses. After all, no matter how much you earn, you’re going to struggle to pay your mortgage if you fritter all your money away on fancy cars and nights out! Often, your lender will ask for your bank statements so they can get an idea of how much disposable income you have.

Nuts About Money tip: Watch your spending when you’re thinking about applying for a mortgage. If you can, steer clear of expensive holidays and extravagant purchases for a bit. This way, you can avoid sending potential lenders red flags!

The value of the property you’re buying

It sounds obvious, but you’ll only be able to borrow the full 4.5 x your income as a mortgage if you’re buying a property that’s worth at least that amount. If you’re buying a cheaper property, your mortgage will be for less.

On top of that, most lenders won’t want you to borrow more than 95% of the value of the property you’re buying, known as a 95% loan-to-value ratio (LTV). This means that in order to unlock the full amount of borrowing available to you, you’ll need to be able to save up a mortgage deposit that’s worth at least 5% of the property.

How much deposit do you need for a mortgage?

In other words, consider how much deposit you’ve saved. If you don’t have a deposit big enough to cover 5% of the property you’re looking at, you’ll normally need to set your sights on a property that’s worth less and, therefore, borrow less money from your lender.

Credit score

Your credit score is a number lenders use to find out how good you’ve been with money in the past. Everyone has one – it’s basically like a footprint of your financial history, where everything you’ve done money-wise is taken into account.

So, why do lenders care about it?

Well, they use your credit score to see how reliable you are with money. If you’ve had trouble with money in the past, like struggling to pay other loans back, they’ll see this as a sign that you might struggle again. And they’ll often be less willing to lend to you as a result.

What credit score do you need for a mortgage?

Don’t worry. If your credit score’s not in great shape, this doesn’t necessarily mean you can’t get a mortgage. However, it might mean that you can borrow less or that you need a bigger deposit to persuade lenders to approve you for one. 

We’d always recommend using a mortgage broker to help you find the best mortgage for you. However, this is all the more important if you have a bad credit score, as they’ll be able to advise you on which lenders are most likely to approve you and they’ll also handle the application for you to make sure it’s as strong as possible.

Job

We’ve already talked about the fact that your salary will affect how much you can borrow. But did you know that your job can also have an effect on how willing a lender will be to give you a mortgage?

If you’re self-employed or on a fixed-term contract, it’s often harder to prove your income than it is for someone in a salaried position.

Think about it: if you’re in a salaried job, you’ll usually get paid the same amount every month and you’ll have payslips to prove it. If you’re self-employed, however, your income is more likely to go up and down each month, based on how much work you’ve had. Similarly, if you’re on a fixed-term contract, you may well have periods between jobs where you’re out of work.

This means it can be a little bit trickier for the self-employed or for people on fixed-term contracts to get mortgages (although it’s still totally doable!). 

For instance, you’ll normally need to be self-employed for around 2 years before applying for a mortgage, or 12 months at the very minimum if you’re very lucky. This is because most lenders will want to look at your accounts from the last 2 or 3 tax years (compared to salaried employees who normally only need a few months of payslips!). You might also need to put down a bigger deposit.

Self-employed mortgage

Similarly to people who have bad credit scores, you’ll generally have fewer lenders to choose from if you’re self-employed or a fixed-term contractor. So, we’d always recommend talking to an experienced mortgage broker who can point you in the direction of suitable lenders.

Want to borrow more?

Tembo will find the best mortgage for you, and have unique options to increase your borrowing.

Visit Tembo¹Visit Tembo¹

How to increase the amount you can purchase a house for

Worried that you won’t be able to borrow enough to afford that home you’ve set your sights on? Don’t worry, all is not lost. There are a few different ways that you can increase the amount you can borrow from a mortgage lender or even just afford a more expensive house. Here are a few tips.

  • Get a joint mortgage: Remember how we said you can usually borrow around 4.5 x your yearly salary? Well, if you team up with someone else to buy a house, you can usually combine your salaries to qualify for a bigger mortgage.
  • Save for a bigger deposit: By paying a bigger deposit, you can supplement your mortgage to afford a more expensive property. You may also be able to unlock a bit more borrowing as most lenders won’t let you borrow more than 95% of a house’s value.
  • Help to Buy Equity Loan: If you’re a first-time buyer, you might qualify for a government scheme called the Help to Buy Equity Loan. This is where the government lends you up to 20% of your property’s purchase price (or up to 40% in London) on top of your mortgage, to help you buy a qualifying new-build property. Essentially, you’ll be taking out another kind of loan from the government on top of your mortgage.
Help to Buy Equity Loan
  • Get help from a family member: A family member who’s in a better financial position than you could help you unlock more borrowing with a guarantor mortgage or a joint borrower sole proprietor mortgage. However, it’s a big commitment. If you don’t pay your mortgage repayments, they’ll be legally obliged to pay them for you, and if they can’t, they could lose their own home.

    Interested in getting one of these mortgages? Check out Tembo¹, they specialise in them.
Joint borrower sole proprietor mortgage

Looking to remortgage?

Working out how much you could borrow for a remortgage is pretty much exactly the same as a new mortgage on a new property for a first time buyer (or home mover). However, you’re probably more concerned with the monthly payments and the interest rate, and changing things like the mortgage term.

Remortgage

It’s still dependent on your yearly income (and any other applicants), and dependent on your current financial commitments – things that could affect your monthly payments, so that’s things like utility bills, outstanding loans, child maintenance, car finance etc (things in a mortgage lenders’ affordability assessment).

If you’re looking for a quick quote for monthly mortgage repayments and an interest rate, just head over to a remortgage calculator¹, rather than just a mortgage borrowing calculator. It will focus more on monthly mortgage payments rather than specifically how much you can borrow.

Habito remortgage calculator

That’s presuming you’re more interested in changing your monthly payments now you’ve actually got the mortgage, and interest rate and maybe mortgage term (all of which you can do if you’re coming up to the end of your fixed term). If you’re looking to release equity (release cash), here’s how to remortgage to release equity.

How to find out how much you could borrow

Want to get a clearer picture of exactly how much you might be able to borrow for a mortgage?

The first step you can do by yourself, it's super easy, it's to use a mortgage calculator, and you can do it right now!

Head over to Tembo’s mortgage calculator¹ and in a few minutes you'll get a good idea about how much you could borrow for a mortgage, and how much the monthly payments will be and even the interest rate. 

You'll also be able to see real mortgage deals from mortgage lenders. All you need is your total annual income (yearly income from both of you if it's a joint mortgage. By the way, your partner is called a second applicant).

Habito mortgage deals

The next is to talk to a mortgage broker. They’re experts in mortgages and will take the time to learn all about your unique situation before advising you on how big a mortgage you’re likely to be able to get your hands on.

Once you’ve seen what deals are available to you, your mortgage broker will then be able to apply for a mortgage in principle for you. This is a document from a mortgage lender showing how much they think they’d be willing to lend you based on a few straightforward checks. 

A mortgage in principle is a great way to get a better idea of whether you’ll get accepted for a mortgage and how big that mortgage could be (although it’s not a guarantee). This will help to guide you in your house hunt, so you don’t go falling in love with a property that you have no chance of being able to afford. 

Mortgage in principle

Once you’ve found your dream property, you just need to give your mortgage broker the go-ahead. They can then apply to turn your mortgage in principle into an actual mortgage. Fingers crossed, you pass the final few checks with flying colours and your mortgage offer will drop through your letterbox before you know it.

Ready to find out how much you could borrow?

Hopefully, now you have a rough idea of how much you’ll be able to borrow from a mortgage lender, and how much the monthly payments might be.

Not sure yet? Use a mortgage calculator¹, it only takes a few minutes, and you’ll get the borrowing amount, monthly mortgage repayments and an interest rate. Or, for a very rough idea simply take your yearly income and times if by 4.5.

However all mortgage lenders are different, so when you’re ready to get house hunting, speak to a mortgage advisor, they’ll get you a mortgage in principle, which firms up how much you could borrow and often from a mortgage lender, so it’s a bit more real.

A mortgage advisor will not only find the best mortgage deal for you, given your financial circumstances, but they’ll even sort out the whole mortgage application for you when the time comes, from start to finish. Pretty great right?

There’s only one rule when it comes to mortgage advisors – use a whole-of-market broker! Otherwise, you can’t be sure you’re getting the best mortgage deal for you.

Not sure where to find a broker? Check out Habito¹, a free, online mortgage broker with great service. Or, if you prefer to speak to an advisor, use Tembo¹, you could be chatting with an expert in just 10 minutes.

It won’t be long before you’re jangling the keys to your brand new home!

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Want to borrow more?

Tembo will find the best mortgage for you, and have unique options to increase your borrowing.

Visit Tembo¹Visit Tembo¹
Fact checked icon
This article has been fact checked

This article was written by the team at Nuts About Money, and fact-checked by 2 independent reviewers. You’re in safe hands.

Want to borrow more?

Tembo will find the best mortgage for you, and have unique options to increase your borrowing.

Visit Tembo¹Visit Tembo¹

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