How To Get A Mortgage On A Low Income

Want to know how you can still qualify for a mortgage on a low income? Read on to find out more.

Firstly, what is your employment status?

Home Income Types How To Get A Mortgage On A Low Income
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 15, 2024

In this article we’ll explain how it’s still possible to get a mortgage on a low income, what lenders minimum income requirements are and how a mortgage broker can help prepare your application to boost your chances of success.

Can you get a mortgage with a low income?

Yes, it’s possible. It really depends on the amount of mortgage you need. For their affordability assessment lenders typically use a multiple of your annual income to determine how much you can borrow – and most will use between 4-4.5 times that amount.

So, for example, you might think an annual salary of, say, £20,000 is ‘low’ but if you need a mortgage of between £80,000-£90,000 then this would fall within the 4-4.5x annual salary formula.

Whilst it’s true to say that the more you earn, the more you can borrow, there’s also a number of other factors a mortgage lender will take into account, such as the value of the property you’re buying, the amount of deposit you have, and whether anyone else will be named on the mortgage with you.

Lenders will consider your mortgage application against their overall eligibility criteria. This might mean getting accepted with a low income but also:

  • A large deposit saved to put down
  • Minimal outgoings that are managed well
  • A good credit rating and looking to buy a property that’s relatively inexpensive
  • Other capital assets in their favour, rather than an actual annual salary

The best way to find out what size mortgage you might qualify for based on your income is by applying for an agreement in principle. Before doing that you can get an idea what this figure could be by using our calculator below.

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

Input full salaries for all applicants

Your Results:

You could borrow up to 

Most lenders would consider letting you borrow

This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.

Some lenders would consider letting you borrow

This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.

A minority of lenders would consider letting you borrow

This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.

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What is the minimum income required for a mortgage?

The good news is that the majority of lenders have no minimum benchmark set, instead preferring to review applications based on affordability and on an individual basis.

Some lenders do have certain stipulations despite this open policy, however, such as Beverley Building Society, which has a minimum income of £25,000 for first-time buyers. Likewise, Leek Building Society requires a minimum income of £20,000 if lending in retirement. This relates to total income required for the mortgage as a whole – even for a joint mortgage.

For those lenders that do stipulate a minimum income, the lowest is Aldermore with a £10,000 limit, followed by Tandem Bank at £12,500. There are a few with a minimum of £15,000 (e.g. Vida Homeloans, Norton Home Loans, and Precise Mortgages) and then right up to £20,000 for Bath Building Society and £25,000 for Swansea Building Society.

How to get a mortgage with a low-income

Getting a mortgage with a low income could be a bit trickier than for someone who earns more. So, the smart move to make first of all, rather than apply to numerous lenders, is to speak with a mortgage broker who already has experience successfully arranging mortgages for people in this situation.

Using our free broker-matching service you can speak straight away to the right mortgage broker by simply making an enquiry online. They’ll be able to help with:

  • Downloading all your credit reports : a strong credit history will definitely count in your favour and reviewing your reports beforehand means you can identify any inaccuracies or outdated information that could hinder your application
  • Finding the right lenders: More specifically those lenders who have a strong track record assisting people with low incomes still secure a mortgage at the best possible rates
  • Gathering your paperwork: Your broker will be able to outline what documentary evidence is required to strengthen your mortgage application

What counts as income on a mortgage application?

It’s worth bearing in mind that whilst you may have a low income from earned employment there are lots of different types of income sources that mortgage lenders will consider when reviewing an application, such as:

  • Rental income (if you’re also a landlord)
  • Investment income – share dividends, etc.
  • Pension income
  • Certain state benefits
  • Commissions and overtime income
  • Child maintenance
  • Income earned overseas

Can you get a mortgage with a large deposit but low income?

Having a large deposit certainly makes getting a mortgage easier, so long as you don’t tip the balance and end up actually out of the running for some lenders that may have a minimum loan limit (this ranges all the way from £3,000 at Norton Home Loans to £200,000 at Market Harborough Building Society). If you have a large deposit, the aim is to find a lender that’s in line with both your eligibility and deposit size.

Be aware that while a large deposit will be an added bonus, and lenders will likely view your application more favourably with one, it doesn’t necessarily mean that’s enough to get your mortgage over the line. You will still be expected to evidence your affordability to comfortably make whatever repayments you do have over the course of the term.

What can you use as a deposit?

There are a number of acceptable means when it comes to a deposit. Lenders will be looking at the source of your deposit as part of your eligibility, and some are more desirable than others. Typical accepted sources would be:

  • Personal savings gathered over time
  • Inheritance
  • Gifted from family members
  • Sale of another property

Alternatively, deposits coming from a gambling windfall or having a lump sum from unregulated borrowing, for example, would most likely be deemed unacceptable. Lenders have to be diligent about any threat of money laundering or funds gained illegally.

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Getting a mortgage with a low income but high assets

There are circumstances in which someone is considered as having a low income while also being financially prosperous because of assets in their name. Rather than looking at your monthly salary, lenders may take an individual approach in this situation and look closely at how stable and robust your assets are as collateral instead.

For example, if you own rental properties that bring a healthy yield, if you have a substantial trust fund or pension income, or even stocks and shares, these could be used as either additional income (in the case of rental yield) or as security for your mortgage.

Can you get a mortgage on minimum wage?

There is no reason why you can’t get a mortgage just because you earn minimum wage, as long as your affordability as a whole is considered adequate. Generally, you should be able to borrow between 4x and 4.5x your income, and if you have a deposit or assets to fall back on, and perhaps a partner to make up a joint mortgage so their income is taken into consideration too, your position might actually be quite strong.

Can you use benefits to boost low income?

The simple answer here is that some lenders accept benefits as a source of income, and some don’t. There are a few out there who go as far as granting mortgages if an income is made up primarily of benefits, such as Hodge, Gatehouse Bank and HSBC, while there are some who might accept a 50:50 split, like Hinckley and Rugby Building Society, and others who would prefer the majority of your income to come from earnings, such as Pepper Money.

Each lender also varies in what kind of benefits they might accept as part of your recognised income, so it’s always worth asking the question and finding out more about this beforehand. Read more about this in our dedicated article to getting a mortgage on benefits.

Speak to a mortgage broker

The financial landscape can be a daunting one, especially with an uncertain market and rules changing all the time. But hope is certainly not lost just because you are on a low income but have aspirations to purchase a home. You will need the right support, guidance and help, however, in order to boost your chances.

This is where our services, with our network of specialist and experienced brokers to hand, comes in. All you have to do is reach out to us and we will match you to the most suitable five-star rated broker to suit your needs and circumstances. Call us on 0808 189 2301 or make an online enquiry for details.

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Earning a salary of £20k a year is a decent income and getting a mortgage on this wage is certainly possible.

There are many factors involved as to how successful you might be and how a lender might view your affordability, including your credit history, your deposit, whether you have a partner who is also earning and how old you are.

If your mortgage is based on an income you no longer have, you might be finding repayments difficult to meet. Perhaps you’ve gone through a redundancy or a change in another kind of circumstance. In this instance, there could be help out there. Firstly, contact your broker for guidance. They might be able to point you in the direction of a mortgage rescue scheme or assistance from the government with paying your interest.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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