What if I want to know how much I can borrow?
How Much Can I Borrow for a Mortgage?
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This guide provides general information only. It is not financial advice or a personal recommendation and does not take account of your individual circumstances.
Quick answer
Lenders typically cap mortgage borrowing at about 4.5 times annual income, including a joint applicant's income, but most people are offered less. The figure depends on your outgoings, credit history, deposit and how secure your income is, and each lender uses its own affordability rules. A mortgage in principle gives a realistic figure from a specific lender.
Key figures
- annual income is where lenders typically cap borrowing (MoneyHelper)
- About 4.5x
- such as loans, credit cards and childcare reduce what lenders will offer
- Outgoings
- lenders have applied their own affordability rules rather than a set stress test
- Since 2022
The short version
Lenders start with your income and usually limit borrowing to a multiple of it. MoneyHelper says lenders typically cap it at 4.5 times annual income, but most people are offered less. On a joint application, both incomes are usually included.
The mortgage borrowing calculator shows a rough range from your own figures.
What counts as income
Lenders look at:
- basic salary;
- pension or investment income;
- child maintenance or support from a former partner;
- variable earnings such as overtime, bonuses or commission, which some lenders count only partly or need a track record of.
If you are self-employed or a company director, income is usually proven with two to three years of accounts and tax calculations. See mortgages for the self-employed and company directors.
What reduces the figure
Lenders take your regular commitments into account, including:
- credit cards, loans and other credit agreements;
- child maintenance you pay;
- household bills, Council Tax and buildings insurance;
- property charges such as service charges and ground rent;
- spending such as childcare, travel and subscriptions, which some lenders ask you to estimate.
Two people on the same income can be offered quite different amounts because of what they already pay out each month.
Other things lenders check
- Credit history. Missed payments and defaults can reduce the amount or lead to a decline. Check your credit report before applying.
- Job security. Whether you are permanent, on a fixed-term contract or in a probation period.
- The deposit. A bigger deposit lowers the loan to value and widens the choice of deals.
- Whether you could cope with change. Formal affordability rules were scrapped in 2022, but lenders still consider whether payments would be manageable if rates rose.
What you can borrow vs what you can afford
The maximum a lender offers is not the same as a comfortable payment. MoneyHelper suggests thinking about whether you could keep paying if rates rose, if one income was lost, or if a change such as a baby or a career break came along. It also suggests keeping about three months of expenses, including the mortgage, as emergency savings.
That is also where protection comes in. Mortgage protection explained covers the cover people use to keep payments going if illness, injury or death affects the household.
How to get a firmer figure
A mortgage in principle is a lender's written estimate of what it may lend, based on your income and sometimes your credit file. It typically lasts 60 to 90 days and isn't a guaranteed offer, but it is far more specific than an income multiple.
Frequently asked questions
Lenders typically cap borrowing at around 4.5 times annual income, but most people are offered less once outgoings and credit history are taken into account. Some lenders may offer more in specific circumstances.
Yes. On a joint application, lenders usually look at both applicants' incomes, and both applicants' outgoings and credit history.
Usually, yes. Regular commitments such as car finance, loans and credit card payments reduce the amount lenders consider affordable.
Often, but lenders differ. Some count only part of variable pay, or need to see it paid consistently over a period, so it may count for less than basic salary.
Sources
Related questions
- What if I want to know what I could borrow?Agreements in principle, credit checks and what happens nextRead the guide
- What if I'm saving for a deposit?Deposits, loan to value and other upfront costsRead the guide
- What if I'm self-employed and want a mortgage?Proving income with accounts, SA302s and dividendsRead the guide
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