Almas Uddin
Founder and Mortgage Advisor
23 Feb 2024
How Do I Calculate the Maximum Mortgage Against My Salary?
If you've tried out a few different mortgage calculators, you'll know that they all give different responses - and for a good reason! The benchmark maximum you can borrow is usually based on your salary and a fixed multiple.
For example, most UK lenders will offer up to four, or 4.5 times, your annual earnings. However, that multiple isn't set in stone, and some lenders can offer five or even six times your income in the right circumstances.
According to the Office for National Statistics, the median average UK pay in 2020 was £31,461, but how a lender might calculate the maximum they can offer against that salary is subject to multiple variables.
Here we'll run through what factors impact the maximum mortgage you can get, and how to increase your approval chances. For more help, or an accurate idea about what you could borrow, give the Revolution Brokers team a call on 0330 304 3040, or email us at [email protected].
How Do Maximum Mortgage Calculations Work?
As we've explained, a lender will take your annual earnings and multiply them to reach an indicative maximum.
For example, if you earn £20,000 a year, you're likely to be offered around £100,000 as five times your income. If you were eligible for an interest rate of 3.92%, over a typical 25-year term, the repayments would amount to around £523 a month.
Lenders don't just consider your earnings but will need to go through a thorough affordability assessment, looking at other things such as your credit history and other debts you might have.
If you're applying for a joint mortgage, these same calculations work identically, but with both salaries combined to arrive at a total.
Let's say you both earn £20,000 a year - therefore you have a combined income of £40,000 and could borrow up to £200,000 with a lender who offers five times earnings.
Can I Get a Mortgage with a Low Income?
You certainly can - it isn't true that if you work part-time, or earn a low wage, you won't find a mortgage. We work with specialist lenders who have lots of experience helping lower-income earners get onto the property market, so there are always options available.
The below table shows you what you might be able to borrow across a range of lower salary levels, depending on what multiples your lender can offer.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£12,000
|
£54,000
|
£60,000
|
£72,000
|
|
£13,000
|
£58,500
|
£65,000
|
£78,000
|
|
£14,000
|
£63,000
|
£70,000
|
£84,000
|
|
£15,000
|
£67,500
|
£75,000
|
£90,000
|
|
£16,000
|
£72,000
|
£80,000
|
£96,000
|
|
£17,000
|
£76,500
|
£85,000
|
£102,000
|
|
£18,000
|
£81,000
|
£90,000
|
£108,000
|
|
£19,000
|
£85,500
|
£95,000
|
£114,000
|
What Mortgage Can I Get on a Salary of £20,000 a Year?
Let's look at the same calculations, with the same range of lenders, and see what the maximum is you might be able to borrow on a salary from £20,000 per annum up to £29,000.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£20,000
|
£90,000
|
£100,000
|
£120,000
|
|
£21,000
|
£94,500
|
£105,000
|
£125,000
|
|
£22,000
|
£99,000
|
£110,000
|
£132,000
|
|
£23,000
|
£103,500
|
£115,000
|
£138,000
|
|
£24,000
|
£108,000
|
£120,000
|
£144,000
|
|
£25,000
|
£112,500
|
£125,000
|
£150,000
|
|
£26,000
|
£117,000
|
£130,000
|
£156,000
|
|
£27,000
|
£121,500
|
£135,000
|
£162,000
|
|
£28,000
|
£126,000
|
£140,000
|
£168,000
|
|
£29,000
|
£130,500
|
£145,000
|
£174,000
|
How Much Can I Borrow on Earnings of £30,000 Plus?
Suppose you're earning between £30,000 and £39,000. In that case, the maximum mortgage you are likely to be approved for is shown in the below table - again, depending on what income multiple your selected provider can offer.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£30,000
|
£135,000
|
£150,000
|
£180,000
|
|
£31,000
|
£139,500
|
£155,000
|
£186,000
|
|
£32,000
|
£144,000
|
£160,000
|
£192,000
|
|
£33,000
|
£148,500
|
£165,000
|
£198,000
|
|
£34,000
|
£153,000
|
£170,000
|
£204,000
|
|
£35,000
|
£157,000
|
£175,000
|
£210,000
|
|
£36,000
|
£162,000
|
£180,000
|
£216,000
|
|
£37,000
|
£166,500
|
£185,000
|
£222,000
|
|
£38,000
|
£171,000
|
£190,000
|
£228,000
|
|
£39,000
|
£175,500
|
£195,000
|
£234,000
|
What Mortgage Can I Quality For on a Salary of £40,000 and Above?
If you have a £40,000 salary and meet the lender's criteria, the below table shows you what sort of maximum mortgage you may qualify for.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£40,000
|
£180,000
|
£200,000
|
£240,000
|
|
£41,000
|
£184,500
|
£205,000
|
£246,000
|
|
£42,000
|
£189,000
|
£210,000
|
£252,000
|
|
£43,000
|
£193,500
|
£215,000
|
£258,000
|
|
£44,000
|
£198,000
|
£220,000
|
£264,000
|
|
£45,000
|
£202,500
|
£225,000
|
£270,000
|
|
£46,000
|
£207,000
|
£230,000
|
£276,000
|
|
£47,000
|
£211,500
|
£235,000
|
£282,000
|
|
£48,000
|
£216,000
|
£240,000
|
£288,000
|
|
£49,000
|
£220,500
|
£245,000
|
£294,000
|
What UK Mortgage Could I Apply for on a Salary of Over £50,000?
If you're earning between £50,000 and £59,000 per year, the below table shows the maximum mortgage you would be eligible for, provided you meet the lender's other criteria.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£50,000
|
£225,000
|
£250,000
|
£300,000
|
|
£51,000
|
£229,500
|
£255,000
|
£306,000
|
|
£52,000
|
£243,000
|
£260,000
|
£312,000
|
|
£53,000
|
£238,500
|
£265,000
|
£318,000
|
|
£54,000
|
£243,000
|
£270,000
|
£324,000
|
|
£55,000
|
£247,500
|
£275,000
|
£330,000
|
|
£56,000
|
£252,000
|
£280,000
|
£336,000
|
|
£57,000
|
£256,500
|
£285,000
|
£342,000
|
|
£58,000
|
£261,000
|
£290,000
|
£348,000
|
|
£59,000
|
£265,500
|
£295,000
|
£354,000
|
How Big a Mortgage Can I Get for a Salary of £60,000 - £65,000?
Here you'll find the same metrics, to show what sort of mortgage level you might expect to be offered on an annual salary of £60,000 and above.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£60,000
|
£270,000
|
£300,000
|
£360,000
|
|
£61,000
|
£274,500
|
£305,000
|
£366,000
|
|
£62,000
|
£279,000
|
£310,000
|
£372,000
|
|
£63,000
|
£283,500
|
£315,000
|
£378,000
|
|
£64,000
|
£288,000
|
£320,000
|
£384,000
|
|
£65,000
|
£292,500
|
£325,000
|
£390,000
|
What Sort of Mortgage Value Could I Get on Earnings between £70,000 and £95,000?
In these higher income brackets, whether as a single or joint applicant, you would be likely to be approved for a maximum mortgage according to the figures shown below.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£70,000
|
£315,000
|
£350,000
|
£420,000
|
|
£75,000
|
£337,500
|
£375,000
|
£450,000
|
|
£80,000
|
£360,000
|
£400,000
|
£480,000
|
|
£85,000
|
£382,500
|
£425,000
|
£510,000
|
|
£90,000
|
£405,000
|
£450,000
|
£540,000
|
|
£95,000
|
£427,500
|
£475,000
|
£570,000
|
How Much Can I Borrow on a Salary of Between £100,000 and £200,000?
If you have annual earnings of over £100,000, you are likely to be more able to borrow a more considerable mortgage value, and negotiate better interest rates.
The maximum you might expect to be offered is shown below, depending on how closely you meet the lender criteria and what salary multiple they can offer.
|
Salary
|
Lender A - 4.5 x Income
|
Lender B - 5 x Income
|
Lender C - 6 x Income
|
|
£100,000
|
£450,000
|
£500,000
|
£600,000
|
|
£110,000
|
£495,000
|
£550,000
|
£660,000
|
|
£115,000
|
£517,500
|
£575,000
|
£690,000
|
|
£120,000
|
£540,000
|
£600,000
|
£720,000
|
|
£130,000
|
£585,000
|
£650,000
|
£780,000
|
|
£140,000
|
£630,000
|
£700,000
|
£840,000
|
|
£150,000
|
£675,000
|
£750,000
|
£900,000
|
|
£200,000
|
£900,000
|
£1,000,000
|
£1,200,000
|
Will a Bad Credit History Impact What Mortgage I am Approved For?
It might since some lenders have stricter criteria than others about accepting applicants with an adverse credit history.
That might mean being offered the same mortgage level, but with higher interest, it might mean being rejected, or it could mean being offered a smaller value of borrowing.
The key to finding competitive lending with bad credit is to know which lenders have the right criteria and to mitigate any credit issues before the application to make it more likely that you are approved.
An experienced broker can recommend lenders who will be happy to lend in your circumstances and help negotiate attractive terms on your behalf.
What Earnings do I Need to Get a Later Life Mortgage?
You can find that some UK mortgage lenders put an age cap on their lending. However, others do not, so it's always worth seeking independent advice from a broker before applying.
Affordability means proving that you can keep up with the repayments, and it might be that you have multiple income streams, from savings, investments, benefits and pension schemes.
Give us a call if you're looking for a mortgage at retirement age or beyond, and we'll run through the best options with you.
Is a Minimum Salary I Need for a Buy to Let Mortgage?
Some buy to let lenders have a policy than any landlords they lend to must earn at least £25,000 a year. This rule is usually in place as a contingency for first-time landlords who don't have previous experience in the rental sector.
Generally, the rental income from an investment property is more critical than your earnings.
Most lenders will need the rent to be around 25% to 45% higher than the interest-only mortgage payments, to assure them that the investment is viable.
Get Help to Calculate your Maximum Mortgage Value
There are lots of mortgage calculators out there, and we have several on the Revolution Brokers website to help you get a rough idea about how much you can borrow.
However, calculators are only estimates, and cannot give an accurate indication as to what level of mortgage you would qualify for. For example, they can't know your credit score, and how likely that means it is that you'll be eligible for a lower salary multiple.
The best way to get a clear idea about how much you can borrow is to consult a whole-of-market broker with oversight of the UK's entire lending sector.
Contact business loan broker on 0330 304 3040, or email us at [email protected] and we'll get the time to know your circumstances so we can provide expert advice about the best mortgage options out there.
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