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How Much You Need to Earn to get a £150,000 Mortgage

Find out how much you need to earn for a £150,000 to £180,000 mortgage and how a sepcialist broker could secure the best rates

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: May 23, 2022

We often hear from customers who have their heart set on a property which would require a £150,000 mortgage, and the first thing they want to know is how much they’d need to be earning to get one.

Jump to our calculator journey to establish what you can borrow, the costs and which of the best deals you’ll qualify for.

Some may have been declined a mortgage, while others are unsure because they have some bad credit history. The good news is that the brokers we work with are experts when it comes to finding the best deal for your circumstances, even if you’ve had bad credit in the past.

Here we answer that question and outline the typical eligibility and affordability checks you will also need to pass to land a home loan of this size.

How much do you need to earn to get a mortgage of £150,000?

This is one of the most common questions we’re asked, and the answer is that it can vary from one lender to another.

Lenders determine how much they’d be willing to lend you based on multiples of your salary. Providing you pass their eligibility checks, most will offer 4x your annual salary, some will offer you 5x and a minority with stretch to 6x, under the right circumstances.

So, to borrow £150,000, with most lenders the combined salary of everyone who is going on the mortgage would need to be £37,500. Some lenders will accept £30,000, and a minority of them will offer you a loan of this amount if you earn £25,000.

To find out exactly how this might fit with your own current income, take a look at our mortgage affordability calculator below.

calculator icon

Mortgage Affordability Calculator

Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.

Input full salaries for all applicants

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.

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Example calculations

The chart below provides further indication of how much you could borrow, depending on what multiples of income your lender is comfortable with. Remember, if you have a partner, your incomes can be combined.

Income 3 Times Income 4 Times Income 5 Times Income 6 Times Income
£25,000 £75,000 £100,000 £125,000 £150,000
£30,000 £90,000 £120,000 £150,000 £180,000
£35,000 £105,000 £140,000 £175,000 £210,000
£40,000 £120,000 £160,000 £200,000 £240,000
£45,000 £135,000 £180,000 £225,000 £270,000
£50,000 £150,000 £200,000 £250,000 £300,000
£55,000 £165,000 £220,000 £275,000 £330,000
£60,000 £180,000 £240,000 £300,000 £360,000

This chart is for comparative purposes only and we recommend that you contact your lender or broker for the most up-to-date information for your circumstances.

That should give you an idea of how much income is needed to borrow £150k, but most providers’ affordability checks are about more than just the numbers on your wage slip.

All mortgage providers have different rules around eligibility and affordability criteria, so it pays to get the right advice on which ones offer the right multiples of salary to suit your needs.

Did you know… You could access 30% more of the mortgage market with a broker on your side – Get Started with an OMA-Expert to find out how much this could save you and unlock more deals.

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What else will the lender taking into account when calculating affordability?

As we’ve already touched on, affordability is about more than what you earn each month from a full-time job. So, when customers ask us “how much do I need to earn to get a 150 000 mortgage?” we’re always quick to assure them that it may be possible to land one even if your salary doesn’t line up with the income multiples in the previous section.

Read on to find out how that is possible…

Supplementing your earnings with other sources

Many UK mortgage providers will allow borrowers to supplement their declared earnings with the following…

  • Benefits
  • Freelance work on the side
  • Commission
  • Bonuses
  • Regular overtime
  • Profit-sharing
  • Dividends
  • Any other legal sources of income you may have

Not all lenders accept the above as declarable earnings, but others will take them into account, some to a greater extent that others (i.e. some providers may cap the percentage of your bonuses and commission that will be used for a mortgage application.)

If some of your earnings come from the above sources (or any other type of supplementary capital) you will need to find a specialist lender to ensure you end up with the best possible deal.

The advisors we work with have access to the entire market and can connect you with the mortgage provider best positioned to match your circumstance and income, with the right lender to offer you a £150k mortgage with favourable rates.

Can I get a £150,000 mortgage if I’m self-employed?

In theory, the answer is yes, but it’s advisable to talk to one of the specialist brokers we work with who deal with self-employed borrowers every day.

The way lenders calculate your income will be different than if your earnings came from a PAYE salary, but that doesn’t mean you can’t get a good deal.

Most will base your earnings on your net profit/salary plus dividends but select lenders are more flexible and can consider other capital.

How long do I need to have been trading for?

The majority of lenders will base what they’re willing to lend you on your average earnings over the last three years, but some will base it on two years, and a handful might consider offering a self-employed mortgage based on 1 year’s accounts, under the right circumstances.

Your outgoings will also be taken into account

It isn’t just a case of how much salary is needed for a £150k mortgage. If the lender doesn’t think you can afford the repayments, they might decline you for one.

A key factor they will look at when assessing your affordability is your other outgoings. If you have significant financial commitments already, such as credit card debt, personal loans and car finance, this could impact on the mortgage provider’s lending decision.

What are the monthly repayments?

The table below is based on borrowing £150,000 at an interest rate of 3% – individual circumstances (such as poor credit history) may affect the rate you can get, but the figures below are designed to give you an indication of the monthly mortgage payment you could expect over different loan terms.

Loan Term Repayment Mortgage Interest-Only Mortgage
5 Years £2,695 £375
10 Years £1,448 £375
15 Years £1,036 £375
20 Years £832 £375
25 Years £711 £375
30 Years £632 £375

The above table is for comparative purposes only. You should talk to your lender or broker for the most up-to-date information for your circumstances.

How much deposit do I need?

How much deposit you need all depends on the loan to value (LTV) ratio. It’s essentially how much a lender is prepared to offer in relationship to the value of the property you’re buying.

A mortgage application with a low deposit will be seen as riskier, resulting in less lenders giving it due consideration and those who will may apply higher interest rates to negate this risk.

Most lenders will accept deposits of 20%, some will accept 10% and a select few will accept as little as 5%.

For instance, if a property is valued at £200,000 and you have £10,000 as a deposit, then the LTV is 95%, which is currently the maximum LTV that most lenders will accept for residential properties.

So what is Loan to Value (LTV)?

As mentioned above, most lenders have a maximum Loan to Value (LTV), which limits how much they are prepared to lend to you. It’s the difference between the property value and the amount of the mortgage.

The amount depends on a whole range of criteria including income, credit history, size of deposit etc.

Based on a £150,000 mortgage, this chart will give you an indication of the value of a property you could purchase if you increase your deposit, which also reduces your Loan to Value.

Purchase Price Deposit Mortgage Loan to Value (LTV)
£155,000 £5,000 £150,000 96.70%
£165,000 £15,000 £150,000 90.90%
£175,000 £25,000 £150,000 85.70%
£180,000 £30,000 £150,000 83.30%
£190,000 £40,000 £150,000 78.90%
£200,000 £50,000 £150,000 75%
£225,000 £75,000 £150,000 66.60%
£250,000 £100,000 £150,000 60%
£275,000 £125,000 £150,000 54.50%
£300,000 £150,000 £150,000 50%

The above table is for comparative purposes only. You should talk to your lender or broker for the most up-to-date information for your circumstances.

Can someone help by gifting the deposit to me?

Most lenders require a gifted deposit to be from a family member (parents, grand-parents, siblings, uncles, aunts, etc), although in certain circumstances one or two lenders may well accept a gift from someone not related (such as a close family friend or other explainable sources).

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Will bad credit affect my application for a £150k mortgage?

If there’s previous bad credit showing on your credit file, then this can limit the number of lenders available to you if you’re looking to get a mortgage with bad credit.

Below is a list of potential credit issues that may affect your mortgage application:

  • Adverse credit overview
  • Low credit score
  • Mortgage Arrears
  • Defaults
  • County Court Judgements (CCJs)
  • Individual Voluntary Arrangements (IVAs)
  • Debt Management Plans (DMPs)
  • Bankruptcy
  • Repossession

How recent and how severe the issue was will have a bearing. Many lenders tend to favour applications made by people with historically older examples of adverse credit issues (as opposed to more recent misdemeanours), while some will ask clients to reapply for a loan once a certain passage of time has elapsed.

The advisors we work with are experts when it comes to giving the right advice to people with bad credit. They have access to the whole of the market and will do everything they can to find the best mortgage to suit your circumstances.

Will age affect my chances of getting a £150,000 mortgage?

It can be difficult for older borrowers as lenders can cap your maximum age at either the time of application, or the end of loan term.

Luckily, there are some lenders who will lend up to 95 years old and a few with no age limit, and the advisors we work with know who they are.

If you already own a property, then an equity release mortgage may be an option.

Can I get a £150,000 mortgage on a unique property?

If the property doesn’t have standard construction (i.e. brick with a tile roof) then there are fewer lenders to choose from as they see them as higher risk.

These include:

There are specialist lenders who will consider some of these types of properties and if you have your heart set on that yurt or castle, talk to one of the expert advisors we work with first.

Can I get a £150,000 mortgage for a Buy-to-let?

Yes. But be aware that the criteria are different to residential mortgages. The majority of lenders ask for a 25% deposit, but there are some who may accept 15%. Some providers also have minimum income requirements for BTL mortgages, especially if you’re a first-time landlord – £25,000 per years is standard.

Many buy-to-let properties are on an interest-only basis and there are many benefits to taking this route.

And, unlike a residential interest-only agreement, you don’t need a repayment strategy as most lenders will accept the sale of the property at the end of the loan term as a way of paying off the capital.

To find out more about buy-to-let mortgages, drop us a line today.

Can I get a £150,000 mortgage for a second home?

The short answer is yes, and there are many reasons someone might want a second home. It could be for business, holiday home or a home for a family member to live in (perhaps a son or daughter at university).

The main thing the lender will consider is whether you can afford the repayments on top of your existing mortgage. They take a stricter view of second home mortgages as they are deemed to be higher risk.

You’ll also need to consider additional costs such as stamp duty, maintenance, council tax and utilities.

To help guide you through the potential pitfalls, talk to one of the advisors we work with. They’re experts in getting the best deal for second homes.

Can I get a £150,000 secured loan?

Yes. As long as you have enough equity in your home. Secured loans are often referred to as ‘secured home loans’, ‘home-owner loans’ or ‘second charges’.

Secured loans are often easier to obtain than an ‘unsecured loan’, but be aware that your property could be repossessed if the loan isn’t repaid.

If you’re seriously considering a secured loan, it’s important that you get the right advice, so get in touch with us today.

If want to speak to an expert for the right advice, call 0808 189 2301 or make an enquiry. We’ll match you with one of the whole-of-market brokers we work with. They will be able to answer your questions and help you find the right mortgage at the best available rate based on your specific circumstances. The service we offer is free, there’s no obligation and we won’t leave a mark on your credit rating.

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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 OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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