What mortgage can I afford with my salary?

How much can I borrow?

When you apply for a mortgage, lenders will need to calculate how much they are happy to lend to you based on your income and your outgoings. It can be useful to get an idea of how much you could borrow yourself, by using Affordability Calculators. These are provided by lenders, and our Affordability Calculator can be found here.

How much can I afford?

Purchasing a property is a big long-term financial commitment. When looking at how much you can afford you need to consider the assets you have already, such as your savings, and any outgoings.

While all lenders will consider your income and expenditure, every lender will have a different way to calculate how much they are willing to lend to you, or whether they will lend to you at all. If you have a joint mortgage, lenders will look at all these factors for all applicants applying for the mortgage.

When it comes to applying for a mortgage, you will need to go into a lot of detail about your personal circumstances, so that lenders can recommend a product that best suits your needs, and ensure you only borrow what you can afford.

There are other costs you may need to consider when you are looking at how much you can afford. For example, solicitor’s fees, mortgage product fees, valuation fees, legal fees, insurance, council tax and other regular bills. It is a good idea to take these costs into account early on, as they can impact what you ultimately decide to borrow.   

How can I work out what I can borrow based on my salary?

Lenders will use an income multiple to assist with their affordability checks. This is typically up to four and a half times the total annual income of you and anyone else you are purchasing a property with. However, some mortgage lenders do offer larger amounts to those in certain professions, higher earnings, or other criteria. It is important to remember that there will still be an overriding affordability assessment to satisfy on top of this.

Affordability calculators can be used to help you work out how much you would be able to borrow based on your salary.

How much does additional income affect this?

When working out how much you can afford to borrow, lenders will look at your income along with any additional income you receive. This can include income from pensions or investments, income in the form of child benefit, rental income, any other earnings you have like overtime, bonuses, commission or if you have a second job. It is important to discuss this with your lender when applying for a mortgage, as different lenders will consider different sources of income. For example, some may consider 100% of overtime income, whereas others will only consider 50%.

How about if my partner is also on the mortgage?

A joint mortgage is a mortgage you take out with someone else, whether that is a partner, a friend, or a family member. Both parties will be jointly liable for making the mortgage payments. If you are applying for a mortgage with another person, lenders will look at all the applicants that will be on the mortgage to work out how much you will be able to borrow and assess eligibility for the mortgage. If the mortgage will be joint, you and your partner’s incomes and outgoings will both be assessed. Typically, taking out a joint mortgage can increase the amount you can borrow.