What Mortgage Can You Get on Your Salary?

When it comes to determining how much you can borrow for a mortgage, most lenders will be willing to offer up to 4 to 4.5 times your annual income as long as their affordability criteria are met. There are some cases in which 5x and 6x incomes may also be attainable, but this will depend on your circumstances.

Here are a few examples of maximum borrowing based on salary (based on 4x to 6x your salary):

• An annual income of £20,000 = mortgage loan of between £80,000 and £120,000
• An annual income of £30,000 = mortgage loan of between £120,000 and £180,000
• An annual income of £40,000 = mortgage loan of between £160,000 and £240,000
• An annual income of £50,000 = mortgage loan of between £200,000 and £300,000

If you'd like to give yourself a better idea of the amount that your income allows, don't forget to try our helpful mortgage calculator. It will help you to get a better understanding of what kind of loan you can get based on your current salary.

If you're applying for a mortgage with someone else, such as your partner or spouse, the 2 incomes can be combined in order to increase how much you're eligible to borrow from lenders. Generally, most lenders will take both salaries into account and then add them together before applying the affordability multiplier. This means that if 2 people earning £25K each apply for a mortgage, most lenders will use £50K as their basis for the maximum loan level.

It's important to note that both applicants must pass the relevant credit checks and prove their incomes via appropriate documents. If one of the candidates has a high salary but a record of making late payments or has bad debts, this could adversely affect the application. Additionally, lenders also take into account any other financial obligations such as child maintenance payments or existing loans.

When evaluating your borrowing capacity, lenders take into account more than just your basic wage. If you earn bonuses or commissions, work overtime, or receive benefits or some type of allowance then lenders may be able to consider some or all of these income avenues when calculating what you can borrow.

Different lenders have different criteria and approaches when it comes to considering income and affordability for a mortgage. For example, some may consider 100% of commission-based earnings on an annual basis, while others only include 75% or 50%. It's important to look for the lender that best aligns with your specific situation. At John Charcol, we have access to the whole market and can help you find the right lender for your circumstances.

When applying for a mortgage, you'll need to provide evidence of your income in the form of payslips, bank statements and/or accounts from the past 3 months. If you’re self-employed or receive commission as part of your salary, you’ll need to provide additional proof of income. This can include accounts from the past 2 years and/or a letter from an accountant or audited accounts confirming your earnings.

If you want the lender to loan you as close to your maximum borrowing as possible, it’s a good idea to take steps to improve your application. Here are several tips to consider:

• Increase your income - increasing your income or salary can help you qualify for a larger mortgage, but obviously this is easier said than done. Consider taking on overtime, second jobs and extra shifts
• Improve your credit history - make sure that all the information on your credit file is correct and up to date by regularly checking it and keep up your efforts to improve your credit score by making sure you pay all bills and debts on time. If you had adverse credit in the past, try to demonstrate that you’ve improved since then by making regular payments and resolving any outstanding debt
• Reduce your other debts - reducing any existing credit card or loan debt will help, as it shows lenders that you’re a responsible borrower and can handle the responsibility of repaying a mortgage. It also leaves more of your income available to cover repayment costs. Overdrafts and payday loans, in particular, should be paid off as soon as possible
• Cut down outgoings – the less the spend each month, the more disposable income you’ll have. This means you’ll be able to afford more in mortgage repayments, which will give you more options when it comes to your mortgage product
• Save up - saving up a larger deposit can reduce your LTV and help you qualify for lower interest rates
• Use an independent, specialist mortgage broker - specialist brokers have access to products and deals that you simply can't find on the high street. While high-street banks have strict criteria and processes, an independent broker can look at your individual circumstances and find a lender that best fits your needs and particular situation. From bad credit mortgages to exclusive products, we can help you source the best deal and secure a bigger loan. At John Charcol, we always strive to provide the best possible advice for our customers. Whether you’re wondering what mortgage you can get on your salary or looking to increase your borrowing potential, we’ll help you find the right deal so you'll be moving home in no time!

To find out more about how much you could potentially borrow based on your salary and circumstances, our affordability calculator provides an estimated borrowing figure in just minutes.

Ultimately, the amount you can borrow will depend on your individual circumstances. Remember to also factor in additional costs such as Stamp Duty and legal fees when budgeting for a mortgage. Doing research ahead of time and making sure all your finances are in order before applying can help you find the best deal available.

At John Charcol, we’re proud to provide our customers with expert advice and guidance when it comes to finding the right mortgage. Our experienced advisers are on hand to assist you every step of the way. Get in touch today to secure the mortgage you need easily and quickly.