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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 8th September 2020*

We get hundreds of people asking us “how much can I afford to borrow?”, and more often than not a borrower will have a clear idea of how much they need to borrow, and are keen to know whether it’s possible on their salary.

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

Many are worried because they have been declined a mortgage or are applying with bad credit. The good news is that the brokers we work with are experts at finding the right mortgage for your circumstances, even if you’ve had bad credit.

Here we’ll answer the questions we get regularly, including:

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How much do I need to earn to get a mortgage of £350 000?

We’ll start by illustrating how much income is needed for a £350k mortgage on a residential property.

The table below reveals the amount of salary you will need for a £350K mortgage. As you can see below, based on the income multiples most lenders offer, you would need to be earning between £55,000 and £60,000 for a mortgage of this amount.

Remember, if more than one person is going on the mortgage, the lender will base their affordability assessment on both salaries, so the combined income of you and the other parties you’re applying with will need to stretch to this amount.

Income3 Times Income4 Times Income5 Times Income6 Times Income

For more information on what salary you’ll need for a 350k mortgage see our affordability section. Or better yet, make an enquiry and we’ll refer you to one of the experts we work with for the right advice on getting the mortgage you need.

How do mortgage lenders assess income?

All lenders take a different approach to income and what they will lend. The main factors are:

Your income type

Some are happy to take 100% of your income into account while others will take a different approach – particularly where that income isn’t earned in the standard way, such as commissions, contracts or bonuses.

This is especially true of those who are self-employed, where lenders all look at different accounting figures, and have their own interpretation of how well the applicant’s business is doing. You can find out more about mortgages for the self-employed here.

What will a mortgage lender count as declarable income?

Some lenders allow you to declare more than just your earnings from a PAYE salary, as mentioned above, there are specialist lenders for self-employed borrowers as well as providers which accept income, bonuses and regular overtime.

There are also providers who will accept the following supplemental sources…

How long you’ve been in the role

The amount of time you’ve been in a job will also be considered by lenders, with most requiring at least 6 months in current role, some happy with just 3 months, a few happy with a new job, and one or two even happy to consider future jobs to start in the next 3 months (so long as a contract is in place).

The generosity of the lender

The amount that you can borrow is determined by the lender’s own affordability assessment, and they are all different.

Most factor in income and outgoings as a whole to calculate appropriate disposable income.

Many also apply income multiple caps, limiting the maximum loan by multiplying your annual salary (as well as any other sources of income, depending on the lender) by a set number.

This is usually between four and five times the amount of earnings, although some lenders will offer income multiples of six and if you’re seeing a second charge mortgage (secured loan) you could get as much as 10 x your income.

How much income do I need for a £350k mortgage on a buy to let?

While your income will be taken into account when applying for a buy to let mortgage (usually around £25,000 per annum is the minimum), lenders typically decide on how much to lend you based on the amount of rental income you’ll be able to achieve on the property.

Lenders will expect your to be able to achieve between 25% and 45% more than your mortgage payment, assuming the mortgage is on an interest-only basis, in rent.

For more information about buy to let mortgages check out our dedicated hub article.

What else affects whether a £350K mortgage is affordable?

There are other factors the lender will take into account when assessing whether you can afford to repay a £350K mortgage, including…

  • Your outgoings:
    Having significant outgoings such as outstanding loans or dependent children could curb the amount you’re able to borrow, although this will be offset against the amount of income you have at your disposal.
  • The amount of deposit you have:
    It goes without saying that the amount you’re able to put down in advance will have at least some bearing on whether your mortgage payments are management since a larger deposit means borrowing less. Furthermore, if you are able to put down more than the minimum requirement, the lender is more likely to offer favourable rates.
  • Term length:
    Spreading your mortgage debt out over a longer-term means paying less each month but being charged more interest, and therefore more overall. The term you request will impact how manageable your monthly payments are, and you should base this on how much you can afford to pay each month.

Find out if you have the income needed for a £350,000 mortgage today

The brokers we work with are experts in their field, and have completed a 12 module LIBF accredited course, and with access to the whole of market, they already know the lenders most likely to lend to you. So it’s no wonder that our customers consistently rate us 5 stars on Feefo.

Speak to an expert on mortgage affordability

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 8th September 2020
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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of 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 info 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.