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How much can I borrow?

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How much can I borrow?

It's the top question for anyone wanting to take out a mortgage to buy their dream home or investment property or looking to remortgage. But the answer isn't as straightforward as you would imagine. The simple answer is: it depends! The popular myth is that you can borrow a multiple of your salary, but most mortgage lenders say that's not what they use as the basis for their lending criteria, as they take all income and expenditure into consideration as well as other factors, such as the size of your deposit.

Amor Financial are based in the heart of Tunbridge Wells and offer mortgage services throughout Kent & Sussex 

Your income

Most obviously your salary, self-employed earnings or income as a director of a limited company, but also:

  • bonuses and commission
  • overtime
  • maintenance payments
  • benefits, such as child benefit
  • pensions
  • dividends on stocks and shares
  • profit from property such as buy-to-let income that has been declared to the Inland Revenue
Your expenditure

Mortgage lenders will want to look at all your regular outgoings, including:

  • household bills
  • loan and credit card repayments
  • school fees
  • life and medical insurance
  • maintenance payments

If you are able to pay off other debts, such as loans and credit cards, they will be taken out of the equation and so could help increase the amount you can borrow with your mortgage. 

The maths

Depending upon what your outgoings are, you should be offered a mortgage that is a multiple of your income. The higher your income and the bigger your deposit, the more options you are likely to have: if you have a 25% deposit or if you earn £60,000 or more a year (which can be between you if you are applying for a joint mortgage), you may be offered up to five times your income, with some lenders willing to offer up to six times. If you earn over £100,000 a year, either individually or jointly, you will have even more options.

There is no one-size-fits-all equation when trying to work out how much you might be able to borrow when taking out a mortgage. It’s therefore important to take professional advice to make sure you have as many options open to you as possible, so you can choose the product that is right for you.

Making your mortgage easy

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