Getting A Mortgage 7x Your Salary

In the UK, the average salary is just over £38,000, while the average house price is almost seven times that amount, at over £260,000. Naturally, many buyers have concerns about whether they’ll be able to borrow enough to buy a home.

This article covers everything you need to know about getting a mortgage for seven times your income –  is it possible? If not, what are the alternatives and where can you look for any advice or guidance you may need.

Can you get a mortgage for seven times your income?

In specific circumstances, it is possible to get a mortgage for seven times your income, but these are very rare and not accessible to everyone who applies.

Most mortgage providers will lend you between four and five times your income. A few will lend six times your income (but only to certain borrowers, which we’ll explain later). To borrow seven times your income, you would need to fall into a niche category, as outlined below.

High-net-worth individuals

If you have either a net annual income of over £300,000 or total assets worth more than £3 million, you’re classed as a high-net-worth (HNW) individual. This allows you to apply for specialist mortgages from private lenders, which aren’t governed by the standard regulations. You’ll also be able to borrow in much higher income multiples than normal.

At the time of writing, one mortgage company is offering x7 salary mortgages to people who don’t have high net worth exemption, but seeking professional advice before approaching them is highly recommended.

There could be alternative ways to borrow the amount you need in a more cost-effective way.

How a broker can help you borrow more

If you’re hoping to borrow more than the standard four to five times your income, it’s beneficial to speak to a mortgage broker. They can help in the following ways:

Practical information

A broker can give you straight answers about the likelihood of being able to borrow five, six, or seven times your income in your situation. They’ll tell you which lenders will consider your application and anything that might affect your chance of approval.

Relevant advice

They can look at your finances and recommend ways to increase your borrowing or afford more. For example, they can tell you how much more you should aim to save towards a deposit to bring down your rate. They may have suggestions of other income you can add to your application that you weren’t aware of, such as benefit income.

Suitable alternatives

If a seven-times income mortgage isn’t an option for you, a broker can suggest one of numerous alternatives. We’ve outlined some below, which are only applicable in certain cases. A broker will explain which is best for you and might be able to suggest other, exclusive options not generally available via mainstream lenders.

Alternative options

Here are some of the other options to consider:

Six-times income mortgages

Certain young professionals (actuaries, barristers, chartered accountants, commercial pilots, dentists, doctors, and solicitors aged under 40) have access to one additional lender who will consider applications to borrow six times your income. The same is true for teachers who earn more than £200,000.

Multiple applicant mortgages

A popular option is to make a joint application with another person. Most lenders will consider the combined income of both applicants when deciding how much you can borrow (though a few use different calculations).

For example, if you earn £40,000, you’ll find it very difficult to borrow seven times that (£280,000). But, if you apply together with someone who earns £30,000, you should find it easier to borrow £280,000, which is only four times your combined income.

You don’t need to be a couple to apply for a joint mortgage and you can even apply with more than one other person. Around 30 lenders in the UK will consider applications from up to four joint applicants.

Applying based on supplemental income

Many people think your mortgage amount is calculated based only on your salary, but that’s not the case. Some lenders will also consider overtime, bonuses and commission, self-employed earnings, benefits income, pension income, or spousal maintenance.

So, you might be able to afford the mortgage you need at a lower income multiple than you think. It’s just a matter of finding a lender who will consider 100% of the supplemental income you make.

Remortgaging

If you already own a property, you can raise capital against it to put towards the purchase of a new property. You’d have a much larger deposit towards this second property, so you could get a smaller mortgage. However, you might then have two mortgages to pay off at the same time.

Equity release

If you already own a property and you’re over the age of 55, you could free up some of the capital from your home with an equity release lifetime mortgage. This cash can be put towards the purchase of a new property. However, you should take advice before doing this as it can be an expensive way to borrow.

Mortgages, lenders and rates

As mentioned above, if you qualify for a seven-times income mortgage, you should expect to pay a much higher rate than you would for a four- or five-times income mortgage. The six-times income mortgages we’ve discussed are a little lower, generally speaking.

If you apply for a multi-applicant mortgage, use supplemental income, or remortgage a different property, you’ll have access to a much wider range of lenders and rates.

Finding a broker for mortgages with higher income multiples

Of course, some brokers are better than others at providing this type of advice and information. It’s best to speak to someone with extensive experience in finding mortgages at higher income multiples.

To speak to someone who specialises in this area of the market, use our broker-matching services. We work with numerous brokers who are experts on different topics, so you can simply tell us what type of mortgage you’re looking for and we’ll connect you with the right person. To arrange a free, no-obligation chat, call 0808 189 0463 or enquire online.