Income is a key factor when it comes to determining the size of a mortgage you can get. Traditionally, lenders used to apply a multiple of your salary to decide how much you could borrow. For example, if you earn £30,000 a year and the lender offers you four times as much, you may be able to get a loan of up to £120,000. So, how much do you need to earn to get a £30,000 mortgage? Generally, lenders offer mortgages of between 5 and 5.5 times your salary. It's best to speak to a mortgage broker to make sure you're getting the best deal for your circumstances.
This is because each bank and mortgage company has its own mortgage calculator to calculate the amount of the loan you may be able to get. You can get free advice from a broker like YesCando, who will help you find and choose the right mortgage for you. The easiest way to find one is by searching “free independent mortgage broker near me” or “free online mortgage broker”.If you earn £250,000 or more, the same multiples will apply, so simply multiply your salary by 4, 4.5 or 6 to find out what type of mortgage you can borrow with your income. Additionally, interest rates can change, which means that lenders want to make sure that you can pay your mortgage both now and in the future.
This will vary once you use a mortgage calculator to calculate how much you could actually borrow; however, this is a good example. According to the Bank of England's figures, the affordability test means that around 30,000 buyers each year are forced to apply for a smaller mortgage. All advisors who work with us are fully qualified to provide mortgage advice and work only for firms authorized and regulated by the Financial Conduct Authority. Currently, interest rates are at historic lows and are likely to increase at some point in the future, meaning that your monthly payments will probably increase unless you use a fixed-rate mortgage. So, even if you're wondering “how can I get the maximum possible mortgage?”; getting your maximum loan will largely depend on your own financial situation.
If you're looking to reduce your payments to make the loan more affordable, you might consider extending the term of the mortgage. The maximum amount you can borrow will vary depending on the lender, so it's important to compare different lenders and compare prices.
