One of the first questions I’m often asked is, How much can I actually borrow for a mortgage? It’s such an important part of planning your move, and knowing what to expect can really help set the right expectations from the start.
The amount a lender will offer you depends on a few different things. It’s not just about your income, although that is a big factor. Lenders also look at your regular outgoings, your credit history, and your overall affordability. So even if you and someone else earn the same salary, what you can borrow might look quite different depending on your lifestyle and commitments.
Most lenders will start with a simple income multiplier. This is usually between 4 and 4.5 times your annual income. In some cases, if your circumstances are very strong and you meet certain criteria, some lenders may offer as much as 5 or even 5.5 times your income. But these higher multiples usually come with stricter requirements.
That said, it’s not quite as straightforward as just multiplying your salary. Lenders take a closer look at things like:
- Your monthly outgoings (credit cards, car finance, childcare, etc.)
- How secure your income is (e.g., employed vs self-employed)
- The number of dependents you have
- Whether you’re buying alone or with someone else
They’ll also do a full credit check to understand how you manage your money. A good credit score can help unlock better deals and potentially a higher loan amount.
If you’re self-employed or have a more complex income, don’t worry. I work with lots of clients in this position. It’s all about presenting your income clearly and choosing the right lender who understands your situation.
In this video, I talk about this in a bit more detail and share what lenders are really looking for when they assess how much they’re willing to lend:
Understanding how much you could borrow is one of the first steps in your mortgage journey. If you’d like me to work that out for you and talk through your options, I’d be really happy to help.
You don’t need to figure it all out on your own. Get in touch and let’s find out what’s possible for you.
Header Photo by Ketut Subiyanto / Pexels