In this article, we’ll look at the factors affecting maximum borrowing limits and how you can get a mortgage for 4 – 4.5 times your salary, or possibly even higher.
What does it mean to get a mortgage 4 or 4.5 times your salary?
A mortgage 4 times your salary is simply your income (or household income if you’re applying for a joint mortgage) multiplied by 4. This figure is then an estimation on how much you might be able to borrow for your mortgage.
Is a mortgage always based on this multiple?
No, not always. 4-4.5 times your salary is the average income multiple used by most high street lenders, so is often quoted as the amount you can expect to borrow. It’s only an average though, and it is possible to secure a mortgage for 5 times or even 6 times your annual salary, depending on your circumstances and on the lender.
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Use this calculator to estimate how much you could borrow. Enter your total household income and the calculator will give you an estimated limit
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.
Get Started with an expert broker to find out exactly how much you could borrow.
How to borrow more
If you feel you need to stretch the 4.5 salary cap to be able to afford the home you want, and you’re confident that you can afford the repayments on a bigger mortgage, there are a few steps you can take to put yourself in the strongest possible position.
Find a specialist broker
Many of the 5 or 6 times salary mortgages are offered by more niche lenders, and so generally are harder to find than if you’re just looking for a standard mortgage. Finding a broker who has experience with higher income multiple mortgages can be invaluable as they’ll have existing contacts and be able to go directly to the lenders who will be prepared to look at your application.
If you get in touch, we’ll arrange for a broker experienced with mortgages using higher income multiples to contact you directly for a free, no-obligation chat.
Consider your other sources of income
Some lenders will look further than your salary from employment, so it’s worth looking at your broader financial picture and considering any supplementary sources of income such as benefits, investments, bonuses and commissions or child maintenance.
Not everyone will treat these sources of income equally, so talk to your broker about everything you have coming in and let them do the hard work in finding the best match for your circumstances.
Check your credit file
While your credit history may not directly impact your maximum borrowing multiple, it plays an important part in your mortgage application and it’s important to make sure the information that lenders see about you is accurate. Get a copy of your credit file and check for any missing or inaccurate information that might otherwise limit your options.
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Other factors affecting borrowing limits
There is more to borrowing limits than basic income multiples and most lenders will also consider the following:
Your annual income of course plays a part in the affordability calculation, but there is also often a link between salary and income multiples. Generally, the higher your salary, the more flexibility you’ll find from lenders – both in what they could offer and also the number who will consider your application.
For example, HSBC have been known to offer 4.49 as a standard income multiple for an annual salary of less than £50,000, but 4.75 on salaries between £50,000 and £100,000 and 5.5 times salary mortgages if you earn over £100,000.
In the case of a joint income mortgage application, the lender will add together your salaries to form the basis of the calculation. Sometimes having just one person out of two on a high salary can mean you can qualify for a higher income multiple.
The amount you’re looking to borrow as a percentage of the total value of the property, (known as the loan to value ratio or LTV), can also indirectly play a part in how much you’re able to borrow on a mortgage by increasing or limiting the amount of lenders and products you qualify for. The Scottish Building Society for example currently offers a 4 times salary multiple on mortgages with a 80% or higher LTV, but 4.5 times if you have a deposit of over 20%.
Some lenders will offer what are often known as professional mortgages to people working in professions such as medicine, teaching, the civil service or legal services. If you think your job might qualify you for this type of mortgage then you could benefit from preferential rates and higher income multiples.
Mortgage affordability checks take into account other regular outgoings, including credit cards, loans, hire purchase or other borrowing commitments, so reducing these can potentially increase the amount you’re able to get on a mortgage. Your broker will be able to advise you on any steps you can take here to put yourself in a stronger position before making your application.
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Which lenders offer 4-4.5 salary multiples
Most lenders will offer these maximum borrowing limits on their mortgages. Leeds Building Society for example, HSBC and the Swansea Building Society all have 4.5 times salary as their standard borrowing limit.
With any lender, borrowing will be assessed according to individual circumstances and even those who give 4.5 times salary as a limit may have scope to increase this on a case by case basis.
Get matched with a broker experienced in higher multiple mortgages
Having the right expert help can make all the difference when it comes to finding the right mortgage for you, whether that’s negotiating the best interest rates on a standard 4.5 times salary mortgage or finding a lender prepared to loan 6 times your annual income. All of the advisors we work with have access to the whole of the market and will have experience of finding higher income multiple mortgages.
Give us a call now on 0808 189 2301 or make an enquiry and we’ll quickly assess your needs to match you with the best broker for your unique circumstances.
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