Salary and Income Mortgage Multiples

Expert guidance on Mortgage Mutiples and how to secure the best rate

Home Mortgage Affordability Salary And Income Mortgage Multiples
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Nathan Porter

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: March 11, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

October 12, 2022

Most lenders will use a multiple of your annual income to set a limit on the size of the mortgage they’ll offer, so it’s important to understand what salary multiple might apply to you, how lenders assess mortgage affordability and how you can maximise your borrowing.

In this article we’ll look more closely at mortgage salary multiples, other factors that can affect how much you can borrow, and how a broker could help you secure the best mortgage offers.

What are mortgage income multiples?

A mortgage income multiple is simply a multiple of your annual income, used by mortgage lenders to get an idea of the size of home loan you might be able to afford. For example, if you were earning £40,000 a year and a lender used a mortgage income multiple of 4, then they would take 4 x £40,000 – £160,000 – as the maximum they would be prepared to lend you.

Historically income multiples were much more fixed when it came to calculating mortgage offers, but nowadays a lot of lenders are more flexible and will look at your broader financial picture to get an idea of how much you can afford to borrow.

What income multiples can you get for a mortgage?

Although there is no hard and fast rule when it comes to mortgage income multiples, 4 or 4.5 times your annual salary is an average and is often used as the basis of any initial calculations. Depending on other factors, which we’ll explore in more detail below, you may be able to get a 5 times income mortgage, a 5.5 times, or even a mortgage for 6 times your salary. In very particular circumstances you may be able to secure a 7 times income mortgage, although these are very rare and normally only apply to high net worth individuals.

Professional mortgages for people working in specific industries such as teaching, medicine and law will often offer higher income multiples, normally up to 5 or 5.5 times salary.

Very similar rules apply for joint mortgages as for single mortgage applicants. Sometimes a lender will offer a slightly reduced income multiple – 4 times income for example for a joint application as opposed to 4.5 times for a single salary – but often it’s the same across both mortgage types and simply means both salaries are added together for the purposes of the calculation and treated as one household income.

Mortgage affordability calculator

It’s hard to know exactly what income multiple you might get without speaking to a specialist broker, but with our mortgage affordability calculator you can get an idea of the size of mortgage you could be offered at your salary, based on different possible salary multiples.

Mortgage Affordability Calculator

Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.

Input full salaries for all applicants
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Your Results:

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 table below shows typical mortgage calculations for a range of different salaries and income multiples.

Income 3x Income 4x Income 5x Income 6x Income
£20,000 £60,000 £80,000 £100,000 £120,000
£30,000 £90,000 £120,000 £150,000 £180,000
£40,000 £120,000 £160,000 £200,000 £240,000
£50,000 £150,000 £200,000 £250,000 £300,000
£60,000 £180,000 £240,000 £300,000 £360,000
£70,000 £210,000 £280,000 £350,000 £420,000
£80,000 £240,000 £320,000 £400,000 £480,000

The above is for comparative purposes only. You should check with a mortgage broker for figures tailored to your circumstances.

What supplemental income will lenders accept?

Your basic annual salary isn’t the only form of income that lenders will consider when assessing affordability, so it’s important to give your broker the fullest possible picture of your financial situation so that they can properly assess the maximum mortgage you can get.

Bonuses, overtime and commission could all count, and in each instance evidence will need to be provided through payslips, often taken as an average over a period of months or years. How much of a bonus is accepted will usually depend on whether or not the bonus is guaranteed or discretionary.

The table below gives an overview of what to expect. As you can see, approaches vary significantly between lenders, so if any of these apply to you then talk to your broker so that they can prioritise your different income types and find the best lender.

Income Types % Considered Notes:
Basic Pay 100% Taken from payslips/contract
Regular Overtime 50-100% Usually average of last 3 months
Irregular Overtime 0-100% Usually average of last 3 months
Annual Bonus 0-100% Taken from payslips/P60
Quarterly Bonus 0-100% From payslips (Usually avg. of last 12 months)
Monthly Bonus 0-100% From payslips (Usually avg. of last 3-12 months)
Commission 0-100% From payslips (Usually avg. of last 3-12 months)
London Weighting 0-100% From payslips
Car Allowance 0-100% From payslips
Shift Allowance 0-100% From payslips (Usually avg. of last 3 months)

Outside of income from employment, some lenders will accept supplementary forms of income such as benefits like child benefits or tax credits, rental income from buy-to-let properties, investment income and pension income.

How a broker can help secure a higher income multiple

Income multiples can feel quite restrictive, especially if you’re on a lower income, and you might be worried that you won’t be able to afford the mortgage you need. A broker is really important here as they will be able to look at your income, including supplementary income that you might not previously have considered, like overtime, bonuses and benefits, and work out the best way to maximise your borrowing potential.

A broker who specialises in finding higher income multiples will have existing contacts with the less well known lenders and be able to guide you to the best deal for you, saving you considerable time and money. Get in touch and we’ll arrange a free, no obligation chat with a broker we work with who specialises in securing higher salary multiple mortgages.

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What factors affect the income multiple you can get?

Because income multiples aren’t the only factor that determines the size of mortgage, it’s important to have an understanding of what other factors might impact your borrowing limits. Essentially anything that makes you less of a risk in the eyes of lenders is a good thing.

Deposit

The size of your deposit relative to the value of the property can impact how much you can borrow as a bigger deposit mitigates risk for lenders. Many lenders will offer a higher income multiple for lower loans-to-value (LTV).

Income

As well as being a part of the income multiple calculation, your overall income level is important. Lenders often offer higher salary multiples to higher earners, either as a single income, one income from a joint application or a combined income.

Employment type

Being self-employed or the director of a limited company needn’t have too much of an effect on income multiples, but it may impact how your income is defined or need additional evidence. If you are self-employed for example, lenders will ideally want to see several years of accounts or self-assessment statements.

If you’re a limited company director then income will usually be calculated as the salary you take from the company as well as dividends. Getting a mortgage if you trade as a limited company can sometimes be more complex though, or require a specialist lender. Get in touch if this is the case for you and we can match you with a broker who specialises in mortgages for company directors.

Property type

Again this comes down to risk, so non-standard construction properties such as concrete prefabs, thatched roofs or steel or timber framed homes may be subject to lower income multiples. Leasehold properties may also be subject to different rules depending on factors such as the term left on the lease. Your broker will be able to advise here.

Mortgage term

Mortgage term can occasionally impact income multiples as stretching over a longer term can reduce monthly payments and make them more affordable, meaning you could potentially afford to borrow more. Lenders will likely look at this on a case by case basis.

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Which lenders offer the highest income multiples?

The income multiples offered by different lenders can vary, and even if a lender says they don’t have a maximum income multiple on their mortgage products, they will still be applying affordability and income checks.

A couple of examples of higher income multiple mortgage lenders at the time of writing include:

  • Barclays can offer a mortgage for 5.5 times your salary if your LTV is less than 85% and either one applicant earns over £75,000 or joint applicants have a combined salary of over £100,000.
  • Halifax will consider a 5.5 income multiple for loans of less than £750,000 with an income of over £75,000 and a minimum 25% deposit.

Do lenders take all of your outgoings into account?

No, not in every case. While lenders want to get a clear picture of your finances, they won’t be checking up on every penny you spend or questioning your weekly supermarket shop. They will be interested though in other borrowing commitments that could impact your ability to meet your mortgage repayments, so this will include credit card debt, personal loans, hire purchase and other forms of debt.

Some common items that might show up on your credit file, such as mobile phone contracts, are often ignored for affordability calculations and if you have a debt that only has a few months left to run or is due to be cleared before you complete your house purchase, some lenders can ignore these too.

Get matched with a broker experienced in higher income multiple mortgages

Go to any mortgage broker and they will be able to shop around for you, but how exactly do you go about finding a broker with specific expertise in higher income multiple mortgages? Simple – use our broker matching service and let us choose the best person for your situation from the skilled and pre-vetted team of advisors that we work with.

Call now on 0808 189 2301 or make an enquiry and we’ll look at your personal circumstances, assess your specific needs and match you with a broker who has exactly the right skills and experience to help you maximise your income multiple and get you the best possible rates.

FAQs

There aren’t any rules specifically for first time buyers when it comes to income multiples, it’s more about your income, deposit and the other factors we’ve discussed here. Being a first time buyer definitely doesn’t mean you can’t still get a good salary multiple.

Having a history of bad credit can definitely put you in the ‘high risk’ category with lenders, and as a result can limit the income multiple you’re able to get on a mortgage. A less than perfect credit file doesn’t mean you won’t find anyone to lend to you though, it just means you’re best going to a broker who works specifically in bad credit mortgages and who will be able to research and access specialist lenders for you.

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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 Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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