How Much Can I Borrow for a Mortgage?

Income Multiples

Most UK lenders begin their affordability assessment using an income multiple — typically 4 to 4.5 times your annual gross salary. For a single applicant earning £40,000, this suggests a maximum loan of £160,000 to £180,000. For joint applications, lenders usually use a combined income multiple.

Income multiples are a starting point, not a guarantee. Lenders then run a full affordability assessment that considers your actual monthly outgoings, debts and the interest rate at the time of application.

Affordability Checks

Since the Mortgage Market Review in 2014, UK lenders must carry out detailed affordability checks rather than relying solely on income multiples. They will assess your income, regular outgoings, existing debts, childcare costs, and how the mortgage would remain affordable if interest rates rose.

Deposit

Your deposit affects the loan-to-value (LTV) ratio of your mortgage. A larger deposit means a lower LTV, which typically gives access to better interest rates. Most lenders require a minimum deposit of 5–10% for residential mortgages, though a 15–20% deposit usually unlocks significantly better rates.

Debts and Outgoings

Lenders deduct your regular financial commitments from your disposable income before calculating affordability. This includes car finance, credit card minimum payments, personal loans, student loan repayments and any other regular financial obligations. Reducing debts before applying can improve your borrowing capacity.

Credit Commitments and Dependants

Your credit history and any dependants (children or other dependants) also affect how much a lender will offer. A good credit history demonstrates that you manage debt responsibly. Dependants increase your essential outgoings, which reduces the amount available for mortgage payments.

Frequently Asked Questions