This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.
The Revolution Brokers team often works with clients who wish to buy a property with a £150,000 mortgage - and want to know what salary they need to earn to qualify.
You can use online calculators to get a rough idea of what you could borrow, but these are only ever indicative. So it is advisable to speak to an independent broker who can give you more accurate figures.
This article will explore how lenders calculate affordability on a £150,000 mortgage and what factors will make a difference to your application.
Should you be looking for help in securing the mortgage you need, or would like a professional assessment of your affordability status, give us a call on 0330 304 3040, or drop an email to info@revolutionbrokers.co.uk.
The salary you need to achieve your desired mortgage will depend on which lender you apply to.
Generally, lenders will look at an initial mortgage cap based on a multiple of your income, usually four times your salary, but sometimes as high as five or even six times.
You would need around a £37,500 salary to qualify for a £150,000 mortgage in most cases. You could still be eligible with some lenders on an income of £30,000 or even £25,000.
The below chart shows some examples of potential mortgage offers depending on your salary, and which lender you apply to.
|
Salary |
Lender A - 3 x Income |
Lender B - 4 x Income |
Lender C - 5 x Income |
Lender D - 6 x Income |
|
£25,000 |
£75,000 |
£100,000 |
£125,000 |
£150,000 |
|
£30,000 |
£90,000 |
£120,000 |
£150,000 |
£180,000 |
|
£35,000 |
£105,000 |
£140,000 |
£175,000 |
£210,000 |
|
£40,000 |
£120,000 |
£160,000 |
£200,000 |
£240,000 |
|
£45,000 |
£135,000 |
£180,000 |
£225,000 |
£270,000 |
|
£50,000 |
£150,000 |
£200,000 |
£250,000 |
£300,000 |
|
£55,000 |
£165,000 |
£220,000 |
£275,000 |
£330,000 |
|
£60,000 |
£180,000 |
£240,000 |
£300,000 |
£360,000 |
Lenders will look at several criteria to determine whether they can offer the funding you need. You can increase your income by factoring in other earnings, depending on what income the lender will consider, including:
Each lender will have a different policy about what sorts of income they will include in the affordability assessment. They may also cap how much of that income they include.
Yes, potentially. Self-employed mortgages are the same as a PAYE mortgage but will use a different set of calculations to work out your average annual income.
Most lenders will consider your net profit, or the salary you pay yourself, but others will include other elements of business profits in their assessment.
Usually, you will need three years of accounts, although some lenders specialising in this sector can accept two years, or sometimes much less.
Lenders will also need to check on your other outgoings, living expenses and existing debts to ensure they believe you can comfortably keep up the repayments.
The monthly cost depends on what interest rate you are being charged, and whether the mortgage is a typical repayment mortgage, or interest-only.
Below is a table showing estimated monthly costs on both mortgage types, depending on the length of the term, and based on a 3% interest rate.
|
Length of Mortgage Term |
Monthly Repayment Mortgage Cost |
Monthly Interest-Only Cost |
|
Five years |
£2,695 |
£375 |
|
Ten years |
£1,448 |
£375 |
|
15 years |
£1,036 |
£375 |
|
20 years |
£832 |
£375 |
|
25 years |
£711 |
£375 |
|
30 years |
£632 |
£375 |
Most mortgage lenders will need a deposit of 20% - others will accept 10% or even 5% depending on the criteria.
Your deposit determines the Loan to Value ratio, and so the more deposit you can offer, the lower the risk and the better interest rates you will be offered.
If you are looking for a mortgage on a property costing £200,000 and have a £10,000 deposit, for example, then the mortgage LTV ratio is 95% which is at the top end of what a lender will accept.
The LTV accepted will vary between lenders, so it's essential to seek support from a broker to work out where to apply, depending on how much you need to borrow and what deposit you have available.
Below, you can see what the LTV ratio would look like in several circumstances, depending on the mortgage value and deposit size.
|
Property Price |
Deposit Available |
Mortgage Required |
LTV Ratio |
|
£155,000 |
£5,000 |
£150,000 |
96.7% |
|
£165,000 |
£15,000 |
£150,000 |
90.9% |
|
£175,000 |
£25,000 |
£150,000 |
85.7% |
|
£180,000 |
£30,000 |
£150,000 |
83.3% |
|
£190,000 |
£40,000 |
£150,000 |
78.9% |
|
£200,000 |
£50,000 |
£150,000 |
75% |
|
£225,000 |
£75,000 |
£150,000 |
66.6% |
|
£250,000 |
£100,000 |
£150,000 |
60% |
|
£275,000 |
£125,000 |
£150,000 |
54.5% |
|
£300,000 |
£150,000 |
£150,000 |
50% |
There are rules around where the cash for your deposit comes from.
Most lenders will accept gifted deposits from a family member, although this usually needs to be a close relative. Usually, a distant relative or friend's gift won't be acceptable, although it may be in some circumstances and with the right lender.
If you have experienced bad credit issues in the past that can mean needing to select the lender carefully, you apply to. That applies if your credit file shows:
A lot will depend on how recently those issues occurred, whether they are now repaid, and what values were involved.
If you are past retirement or approaching retirement age, you might find that some lenders cannot accept your application due to age caps.
However, we work with lenders who accept applicants up to 95 years old, and so there are plenty of later life mortgage options out there.
Probably, yes, but if your property falls into any of the following categories, you might need to use a specialist lender:
Yes, you can borrow £150,000 against a buy to let property if you have the right deposit available, meet the lending criteria, and can demonstrate that the rental income will sufficiently cover the interest-only payments.
Most BTL lenders require a 25% deposit, although some will work with 15%.
Some lenders have a minimum income requirement, usually around £25,000. This rule usually applies to first-time landlords who don't have experience in the rental sector.
You can borrow against a second home, whether it is a holiday home, temporary work accommodation or for a family member.
Lenders tend to be stricter in their affordability assessments since they need to see that you can afford this second mortgage as well as keeping up with repayments on your primary home.
This assessment will include costs such as council tax, stamp duty and upkeep.
If you have sufficient equity in your property, a second loan or second charge mortgage is an alternative option.
The criteria tend to be less strict, but it is essential to understand that this type of loan is still secured against your home, which could be repossessed if you don't keep up with the payments.
Contact business loan broker for more advice about how to find a £150,000 mortgage. Our team is independent and has access to the whole of the market to find you the very best deals available.
Give us a call on 0330 304 3040, or email the team at info@revolutionbrokers.co.uk.
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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.
Revolution Brokers understands that mortgages can be complex and confusing!
Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.
