What Income Is Needed To Get a Mortgage?

Typically, most mortgage lenders will allow you to borrow up to 4.5 times your annual salary. If you’d like to see how this could work out for you based on your own annual household income, take a look at our mortgage affordability calculator here:

Our mortgage affordability calculator should be used as a guide. If you want a more accurate idea of what you might be able to borrow, speak to one of the advisors we work with.

Mortgage affordability examples

The table below shows how much you could borrow at a range of different incomes and how the income multiple offered by the lender impacts the size of the loan.

Although it’s unlikely that someone earning £20,000 (as shown in the first row) would be able to achieve a mortgage at a multiple of 6x their income, as you can see, the difference between 4x (£80,000) and 6x (£120,000) is substantial.

The only circumstances where lower earners may potentially be able to access higher income multiples are those in specific careers, such as police officers, as typically, lending in income multiples of 5 or over is reserved for those earning over £50k.

*The above table is for demonstrative purposes only, and you should always consult your lender or broker for the most up-to-date information.*

It’s important to bear in mind that the income figure in the table refers to household income. Therefore, if you apply jointly with another applicant, both incomes will be combined, and it can make buying a suitable home much easier to achieve.

How a broker can help secure the mortgage you need

There are plenty of ways a broker can help you to achieve the size of loan that you’re looking for, but it depends on your exact goals and circumstances.

If your main goal is to borrow the largest loan possible for your income, they could:

• Not all lenders will consider 100% of your additional sources of income, but a broker can find out which lenders are more likely to consider this
• Find lenders with the most flexibility on term lengths, allowing you to extend the term
• Find the lender with the best interest rates for your circumstances, minimising your monthly payments
• Provide advice on improving your credit record, which can also help you access better interest rates
• Help you to organise your finances to increase your disposable income, maximising the amount of income lenders can consider in their calculations.
• Recommend ways to increase your deposit, either through government schemes or by accepting a gifted deposit from someone.
• Suggest different ways to maximise your borrowing, such as through a joint application, potentially with the help of others through the JBSP (Joint Borrower Sole Proprietor) mortgage, or using a guarantor.
• Ensure that borrowers in trusted professions find lenders that will offer professional mortgages at a higher borrowing level, and that high-net-worth individuals approach lenders able to offer them 6 times their income or more.

The good news is that regardless of which of the above situations applies to you, we can pair you with a broker who specialises in that area. Get in touch today to set up a chat with the broker best placed to help you.

What income is needed for a 120k mortgage?

If you’re aiming for a mortgage of £120,000, you’ll likely need to earn between £26,000-£30,000, assuming you’re offered an income multiple of 4-4.5 times your income.

Finding a lender willing to go above 4.5 x salary at this income level will be difficult. Still, a few lenders offer 5 x salary with no minimum income requirement, depending on the size of deposit you have available.

160k mortgages

The table below shows how much you’ll likely need to earn if you’re looking to borrow £160,000. Don’t forget that the income needed can be spread across more than one applicant.

400k mortgages

To get a mortgage of £400,000, you’ll need to earn between £88,000 and £100,000 at 4-4.5 times your income.

However, at this level of income, there will be more lenders available to you that are willing to offer 5 or even 5.5 times your household income, meaning that it may be possible to achieve this size of a loan with as little as £72,727, especially for those in secure professions.

If you’re looking to borrow a little more, the income needed for a £450k mortgage would typically be between £112,500-£100,000. It could be as low as £75,000 if you qualify with a lender offering an income multiple of 6 times your annual salary.

500k mortgages

If you’re looking to borrow £500,000, you’ll need an income of £111,111 for a standard 4.5 x your income multiple mortgages. If you earn this amount individually, however, you will likely qualify for a high-net-worth mortgage, as the earning threshold is typically £100,000. 

600k mortgages

The table below demonstrates how much you would need to earn, either individually or jointly, to borrow a home loan of £600,0000.

Typically, mortgage lenders will only consider the income of 2 applicants for a joint mortgage, but some are willing to consider 3 or 4 applicants in certain circumstances, which could assist with borrowing at this level.

800k mortgages

This table demonstrates the household income you would need to borrow £800,000. At this level of borrowing, you may find that fewer high street lenders can help you, as many cap their borrowing at £750,000.

Plenty of specialist lenders can lend at this level, so it’s highly recommended that you speak to a broker to access the lenders that can help you.

£1 million mortgages

If you’re looking to borrow £1 million or more to purchase property, then this will be considered a large mortgage loan and will typically only be offered by private banks and specialist lenders.

You will also likely need to be a high net worth individual, as even at 6x your income, you’d need to be earning £166,666 to borrow this much. Assuming you went with a lender that only offered 4.5x your income, however, you would need to be earning £222,222.

How the level of security you offer can impact your mortgage

Most lenders decide on the income multiples they are willing to offer and the interest rates based on the risk involved in lending to you. The more substantial security you can provide, the less of a risk your borrowing becomes; therefore, the lender is more confident with their offer.

You can provide security in the following forms:

• Deposit – A deposit is almost always needed, but the larger the deposit you offer, the lower your loan-to-value ratio (LTV). As some lenders have maximum LTV limits on their higher-income multiple borrowing, offering a higher deposit could result in borrowing more in certain circumstances (albeit indirectly).
  Typically, those offering more than 20% deposit can access the most attractive income multiples and interest rates.
  It’s possible to get a mortgage with as little as a 5% deposit; however, the interest rates will be higher, and you’re unlikely to be able to access the same level of borrowing regardless of your income.
• Additional assets—If you already own other properties or similar assets of significant value, some lenders may be willing to consider them in addition to your deposit or in lieu of one, depending on their value.
  As these assets can be used as security on your loan, this lowers your risk profile from a lender’s perspective and could potentially open up higher-income multiple borrowing in some circumstances.

Get matched with the ideal broker for your income

No matter what your circumstances are, if you’re looking to make the most of your income to achieve the loan size you need to buy your dream home, our free broker-matching service will pair you with an expert with the exact experience necessary.

There’s no obligation whatsoever, and your initial consultation will always be free, so you have nothing to lose. Simply contact our team on 0330 818 7026 or make an enquiry to find out how advice from the right broker can help you achieve your home ownership goals.