How much can I borrow on a mortgage?
Are you wondering what level of mortgage lending you could secure?
The answer depends on several factors, including your income, outgoings and credit history. We'll break down how mortgage lenders calculate borrowing amounts, what can affect your mortgage affordability, and how working with an expert mortgage adviser can help you borrow with confidence.
How do mortgage lenders calculate how much you can borrow?
Most mortgage lenders use a combination of income multiples and affordability checks to decide how much they are willing to lend.
Income multiples
As a general guide, lenders typically offer between 4 and 4.5 times your annual income. Some lenders may go higher in certain circumstances, particularly for high earners or applicants with strong financial profiles.
For example:
- A single applicant earning £40,000 may be able to borrow around £160,000 to £180,000
- A joint application with a combined income of £70,000 could potentially borrow £280,000 to £315,000
These figures are only a guide though. The final amount depends on affordability checks and lender criteria.
Affordability assessments
In addition to income, lenders look closely at your monthly outgoings to ensure the mortgage is affordable both now and in the future. This includes:
- Household bills and living costs
- Credit commitments such as loans, car finance and credit cards
- Childcare costs and maintenance payments
- Future interest rate stress testing
Even if your income multiple looks strong, high outgoings can reduce how much you can borrow.
What affects your mortgage borrowing amount?
Several factors can influence how much you can borrow on a mortgage.
Your income type
Lenders assess different income types in different ways, including:
- Basic salary
- Bonuses and commission
- Overtime
- Self-employed income
- Contract or freelance earnings
- Benefits
If your income is variable or self-employed, lenders may require two or more years of accounts or tax calculations.
Your deposit
The size of your deposit affects your loan to value (LTV) ratio, which can impact both how much you can borrow and the interest rates available. A larger deposit often means better mortgage deals and more lender choice.
Your credit history
Your credit score and credit report play an important role. Missed payments, defaults or county court judgments can limit lender options, while a clean credit history improves your borrowing potential.
Your age and mortgage term
Lenders consider your age at the end of the mortgage term. A longer term can increase affordability by reducing monthly payments, but not all lenders will lend into later retirement without evidence of income.
How much can I borrow as a first-time buyer?
First-time buyers are assessed in the same way as other applicants, but some lenders offer more flexible criteria or higher income multiples. Government schemes and lender incentives may also help, particularly if you have a smaller deposit.
Speaking to a mortgage adviser early can help you understand your realistic budget before you start house hunting.
Why use a mortgage adviser to work out how much you can borrow?
Online mortgage calculators are useful, but they don’t tell the full story. A mortgage adviser:
- Assesses your full financial situation
- Knows which lenders are more flexible
- Can maximise borrowing where appropriate
- Helps you avoid applying to unsuitable lenders
At Simpson Financial Services, we take the time to understand your goals and match you with the most suitable mortgage options available.
Book a free mortgage meeting with our expert adviser
If you’re wondering how much you can borrow on a mortgage, getting professional advice can make all the difference.
You can book a free initial meeting with our expert mortgage adviser, Chris Le Marquand, to receive clear, personalised guidance with no obligation. Whether you’re a first-time buyer, moving home or remortgaging, Chris will help you understand your borrowing power and next steps.
