Getting a Mortgage on 3 Times Your Salary

We’ll explain what borrowing for your mortgage at 3 times your salary means, what else mortgage lenders look for and how you could increase your borrowing amount with the help of a broker.

Is a mortgage always based on 3 times your salary?

No, not at all. Some will use 3 times a salary as a benchmarking tool, but others use different salary and income multiples. Most will work off 4 or 4.5 times their annual income, while some will go as high as 5 times or even 6 times their salary.

It’s not just based on this methodology, as lenders will also closely examine your credit history, monthly expenditure, age and income type as part of their affordability assessment. Each lender has their own way of determining what mortgages they’re happy to offer.

It’s worth noting that if you’re buying a property with someone, their salary will also be considered. Some lenders will add the two salaries and multiply them as one sum. For example, if one person earns £28,000 and the other earns £35,000, those two amounts would be added and multiplied by 3 to get a potential mortgage size of £189,000.

Different lenders will, however, multiply the higher salary by 3 and then add the second. In this case, that would amount to £133,000. A broker would know which calculations certain lenders use.

Why might a mortgage lender only offer 3 times a salary?

Some use three times a salary as a more conservative default, but others might only offer this specifically if the applicant needs to borrow this amount.

How much can be borrowed?

The below table gives an idea of the difference higher multiples than 3x can make to a mortgage.

Find out how much you can borrow at 3 times your salary using the calculator below.

The above is for illustrative purposes and might not be exactly what a mortgage lender offers. Working with a broker can give you a much more accurate figure.

How to borrow more than 3 times your salary

Borrowing more than 3 times your salary is pretty common and something that many mortgage lenders facilitate.

To improve your chances, there are some steps you can take to increase your borrowing limits:

• Clean up your application by seeing if there’s a way to address any bad credit or remedy any debt to increase the chances of you accessing a mortgage 4 or 5 times a salary (or higher). You can do this by checking your credit report.
• Consider applying for a joint mortgage. With a joint mortgage, both of your incomes will be considered, increasing your borrowing limit. 
• Talk to an expert about how to go about including other income sources, such as investments or benefits, in your application. That way, if 3 times an income is what you’re limited to, the total amount should be slightly higher.
• With the help of your broker, you can apply to a lender known for offering higher multiples than 3 times a salary or one that doesn’t consider multiples at all.

Which mortgage lenders offer income multiples higher than 3?

If you meet their criteria, most high-street lenders, such as Clydesdale Bank, Natwest, and HSBC, will offer upwards of three times your salary. More specialist lenders, such as The Teachers Building Society, will also offer this. A broker would know of any that typically stick to three times.

Alternatively, some lenders, such as Together, Central Trust, and Newcastle Building Society, don’t use multiples of a salary. Instead, they use their own affordability assessments to determine how much they will loan and at what interest rate.

What other factors affect how much you can borrow for a mortgage?

Income isn’t the sole factor influencing a mortgage application. Most lenders, even if they are using income multiples as a starting point, will want to take a more thorough look at other financials to assess how reliable a borrower you’re likely to be.

They’ll often ask for information on:

• Your outgoings: How much disposable income do you have left after bills?? Do your direct debits get paid on time? How much is left in your account at the end of the month? Ultimately, lenders want to ensure you can afford the monthly repayments.
• Type of employment: If you’re self-employed, you could be viewed as a riskier borrower, but extra paperwork on tax returns and invoices can sometimes assuage any reticence. If you have a full-time job in a profession lenders deem trustworthy, a lawyer, dentist, or doctor, then you’re more likely to be approved for higher multiples than three times your salary.
• Your deposit: A bigger deposit means a lower loan-to-value (LTV) ratio. That can mean more lenders and products to choose from. More lenders mean you’ll likely find one willing to offer above 3 times your salary. Showing a higher deposit gives lenders confidence that you can save and build up money.
• Any debt or bad credit: Both of these could affect your mortgage application and what a lender is willing to let you borrow, as any repayments you are making in relation to these things will be factored into your debt-to-income ratio. Working with a broker prior to application can help address any of these potential red flags.

Get matched with the right mortgage broker for your financial situation

With some lenders using an income multiple of 3 and others not, it can be hard to know how much emphasis you should put on your income and how to use it as a guide for what size of mortgage you could get. This is where a broker can help.

They’ll quickly be able to decipher what size of mortgage you’re likely to be offered and compare it against those offered by lenders using a different affordability scale. Regarding mortgages, it’s not worth going alone when the brokers we work with can give you answers and offer support throughout the process.

Get in touch today, and you’ll be matched to a specialist mortgage broker. Call 0330 818 7026 or make an inquiry online for a free, no-obligation initial consultation.