If you're hoping to take out a mortgage, our borrowing calculator will give you a rough idea of how much a lender might offer you based on how much you earn and whether you're buying with anyone else.
How do mortgage lenders decide how much you can borrow?
Your salary will have a big impact on the amount you can borrow for a mortgage.
Usually, banks and building societies will offer between three and four-and-a-half times the annual income of you and anyone you are buying with. This means if you're buying alone and earn £30,000 a year, you could be offered anything between £90,000 and £135,000.
There are exceptions to this, however, especially if you work in a certain profession. Some mortgage providers will lend doctors, dentists, and other professionals up to six times their annual income.
- Find out more in our December 2018 news story: can your job get you a bigger mortgage?
What other factors will impact how much I can borrow?
Lenders will want to know how you spend your money as part of an affordability assessment. You are likely to get questions about:
- Debt repayments (e.g. student loans and credit card bills)
- Regular bills (e.g. gas and electricity)
- Transport costs
- Grocery costs
- Spending on leisure activities
Your lender will also want to see recent bank statements and payslips to support your application.
Read our guide to saving for a mortgage deposit to find out more about keeping outgoing costs down.
Though it’s something you have no control over, interest rates have a part to play when mortgage providers decide how much they might lend you.
In most cases, lenders will ‘stress test’ any proposed mortgage repayment plan to make sure you could withstand a rise in interest rates of at least three percentage points. Use our mortgage interest rate rise calculator to see how your mortgage payments would be affected if your interest rate increased.
If you have a fixed-rate mortgage, interest rate rises won’t affect you until the end of your fixed-rate period. But with a variable-rate mortgage, your interest rate could rise or fall at any point during your term.
- Find out more: check out our full guide to how much mortgage you can borrow
Get expert advice on how much you can borrow
If you’d like to discuss how much you can borrow and get expert advice on the best lender to apply to, call Which? Mortgage Advisers on 0800 197 8461 - or fill out the form below and they’ll call you.