How big of a mortgage can I get?

What size mortgage can I get on my salary?

You can typically get a mortgage between 4 to 4.5 times your earnings. So if you earn £30,000 a year and apply for a standard residential mortgage, you can expect to borrow somewhere between £120,000 to £150,000. If you’re buying a home with your partner, friend or sibling, lenders will take your combined household income into consideration instead. So if the person you’re buying with also earns £30,000, you could be looking at between £240,000 and £300,000 with a traditional mortgage. 

If you’ve managed to save a deposit, don’t forget to add your savings to your estimated loan amount. This will give you a rough idea of what type of property and location you can afford. 

For a more accurate estimate, register with Tembo. All you need to do is answer a few quick questions and we’ll send you a personalised Mortgage in Principle in just 10 minutes.

If your deposit and a traditional mortgage isn’t enough to buy a home, you’re not alone. In fact, the average UK homebuyer needs 10 times their annual earnings to afford a house. This can make things particularly challenging for single homebuyers, but even couples can struggle too!

As you might’ve guessed, it’s even worse in London, where the average home costs 16.4x the average earnings. Things are slightly more positive in Northern Ireland, where the house price to income ratio drops to 7. Even so, the amount needed to buy a home is much greater than the 4 to 4.5x income multiplier used by most standard mortgage lenders. 

All hope is not lost, though. Thanks to a number of innovative lenders and first-time buyer initiatives, it may be possible to boost your budget and get a bigger mortgage. 

Learn more: Buying a house timeline

How can I get a bigger mortgage?

You may be able to get a mortgage for more than the standard 4-4.5 times your salary if you have a good credit score and a bigger house deposit. Lenders usually require a deposit of at least 10% of the property’s price, but some are willing to offer bigger mortgages (and lower interest rates) to those with a bigger down payment. Exactly how much you’ll need to access a bigger loan will depend on your lender. Some will offer better terms to those with a 20% deposit. Others will want you to have saved 40% or more. There are also higher lending schemes for certain borrowers that let you borrow up to 5.5 times your salary.

These include:

5.5x mortgage

If you’re a first-time buyer with an income of £37,000 or more, you may be eligible for a 5.5x income mortgage — even with a deposit of just 5%! If you’re buying with someone else, you’ll need a joint income of at least £55,000.

You’ll need a good credit score and to be permanently employed with at least 12 months of employment history. 

You’ll also need to get a 5 or 10-year fixed-rate mortgage, so the scheme might not be suitable if you’re only planning to stay in the property for a few years, or want to fix your mortgage deal for less than this.

Learn more: How long should I fix my mortgage for?

Professional mortgages

If you’re a doctor, nurse, lawyer or accountant, you may be able to borrow 5.5 times your income, even if your salary isn’t particularly high at the moment. This is because lenders tend to look favourably at those in ‘professional’ careers. As far as they’re concerned, applicants in these roles are more likely to benefit from regular pay increases and less likely to be out of work.

To get a professional mortgage, you’ll usually need a good credit score and to be registered with an appropriate professional body for your field. What counts as professional can vary from one lender to another, so it’s a good idea to speak to a mortgage broker like us who specialises in these types of schemes. We’ll know which lenders are most likely to approve your application and offer the best deals.

Deposit Boost

If you have a home-owning family member eager to help you get on the ladder, a Deposit Boost could be the secret to increasing your borrowing potential. This involves releasing some of the equity from their home and putting it towards the deposit on yours. This could mean you need to borrow less for a mortgage, access better interest rates or afford a larger property.

Income Boost

Another trick to increase your mortgage amount is an Income Boost. Also known as a Joint Borrower Sole Proprietor mortgage, an Income Boost lets you add a loved one’s income to your mortgage application, without adding their name to the property itself. 

Let’s imagine your mum earns £40,000 a year and wants to help you buy your first home. If you (either alone or with your partner) have an income of £50,000, you can usually expect to borrow up to £225,000 with a standard mortgage. 

But, if you add your mum’s income to the mortgage with the help of an Income Boost, you’ll increase your budget by up to £180,000! This could see you buying a property worth around £445,000, assuming you have a 10% deposit. 

Is spending 50% of my salary on my mortgage too much?

Spending 50% of your salary on mortgage payments might be too much, even if you’re currently spending a similar percentage of your salary on rent. The higher your mortgage payments, the more challenging it can be to keep up with your expenses. This is particularly true if you lose your job or you’re unable to work due to an illness or injury. 

Before approving a mortgage application, lenders have a responsibility to check that the borrower can afford their repayments. They’ll do this by carrying out a series of affordability checks and ‘stress testing’  your budget to see whether your mortgage would still be affordable if your interest rate increased or you experienced a loss of income. If a lender is concerned about your ability to repay, they might reject your application or offer you a more affordable mortgage. 

This means that without a guarantor, you may find it difficult to get a mortgage with repayments worth 50% of your salary anyway. This may be frustrating, particularly if you’re finding it hard to save a deposit or you’re hoping to buy in an expensive location. Take a look at our guide to shared ownership for an alternative way to buy your first home.