What's my maximum mortgage amount?
The amount you can borrow with a mortgage will depend on lots of different things, such as; income, credit history, age, employment status, and the value of the property you want to buy. Generally speaking, lenders in the UK will lend around 4.5 times your annual income, although some lenders may consider higher amounts (up to 5.5 time your annual income).
Additionally, you’ll need to provide a deposit, which has to be at least 5% of the purchase price. However, the larger the deposit, the more favourable the terms of the mortgage may be.
Check out our mortgage calculator for an idea of your borrowing potential.
It’s important to note that affordability assessments will be conducted by the lender to ensure that you can afford to repay the mortgage, taking into account things like your income, outgoings, dependents, overall term and any other financial commitments. This will all help to determine your maximum mortgage amount.
But I can easily afford my rent each month, why can I borrow so little?
Affordability assessments have been drawn up to comply with regulations set by the higher powers. It basically looks at your income, outgoings, credit score, age, term requirement (so how long you want the mortgage for) and whether you’re financially responsible for anyone else. Once all of this information is added to the lenders’ own stress tests (things like cost of living estimates and bills etc), the figure that comes out is the maximum lenders can consider.
Even though it might not be much it all lends itself back to the responsible lending side of things and even though you could easily afford the monthly payment, the lenders annoyingly aren’t given the OK to lend you any more.
