What salary do I need to buy a house in the UK?

What salary do I need to buy a home in the UK?

Whether you can buy a home with your current salary depends on where you’re living, the cost of the property you want to buy, the size of the deposit you have saved up and if you want to use any budget-boosting schemes like Shared Ownership.

In different areas, house prices can range significantly, as well as by the property type - if you’re buying a 4-bed detached house, this will likely be more expensive than a 1-bed flat. A higher property price means you’ll need to borrow more from the lender for a mortgage. Most lenders are willing to offer mortgages of 4 to 4.5x your household income, although you may be able to borrow more or less than this depending on your affordability.

So if you want to buy a 4-bed house, your household's salary will need to be enough to get a loan big enough to cover the rest of the property price after your deposit. This is why having a bigger deposit can reduce the salary you need for a mortgage - with a larger deposit, you’ll need to borrow less to purchase the same property.

However, keep in mind that you may be offered less than the standard 4-4.5x your income for a mortgage if your affordability is lower. For example, having a low credit score or high expenses due to dependents like children, existing credit commitments, such as credit card debts and unsecured loans or lots of outgoings, could reduce the size of a mortgage you can get. Lenders will also want to make sure that the mortgage you take out is affordable even if your interest rate were to increase, so they will consider this when calculating your max borrowing.

The good news is that you could borrow up to 5 or 6 times your income. And don’t forget that if you’re buying a home with your partner or a friend, both your incomes will be taken into consideration too, and so you’ll have even more buying power. There are also dozens of first-time buyer schemes and savvy savings accounts available to could help you buy a house on a modest income and even save a deposit sooner.

Learn more: Buying a house on a single income

How can you borrow 5 times your salary for a home?

If you’re a first-time buyer, you may be eligible for a 5x Income Mortgage. You only need a 5% deposit, but you’ll need an excellent credit score and a salary of at least £37,000 a year if you’re buying alone or a joint income of at least £55,000 a year if you’re buying with a partner or friend. 

You could also borrow 5-6x your income if you’re eligible for a loan through a Professional or Key Worker mortgage. These mortgages are for those who work in a “professional” field (think solicitor, accountant, architect), or doctors, nurses and those in similar key worker roles.

You might like: Can I get a mortgage 5 or 6 times my salary?

Other ways to buy a home with a low salary

Income Boost mortgage 

You could get a bigger mortgage with the help of an Income Boost mortgage. This is a type of guarantor mortgage, where you could boost your borrowing potential by adding a relative’s income to your mortgage application, as well as your own. Although they’ll be named on the mortgage, they won’t be named on the property itself, so your home will be all yours. But if you miss any mortgage payments, your guarantor will need to step in and make the payments for you.

Deposit Boost mortgage

You can reduce the mortgage size you need by putting down a larger deposit. While this may sound easier said than done, one way you could do this is through a Deposit Boost. If you have family members who own a home, such as your parents, they could use a small mortgage to unlock equity from their property to help increase your deposit. This is a way for home-owning family members to help you onto the property ladder without needing significant savings.

Shared Ownership

Another option is Shared Ownership. It comes in many shapes and sizes but typically involves buying a portion of a property and paying rent on the rest. Because you're only purchasing a share of the home, you'll need a much smaller deposit and mortgage than you would if buying a home the traditional way. Over time, you can staircase your way up to full ownership by increasing your equity stake in the property.