Mortgage Multipliers For Couples

Applying for a joint mortgage can be an effective way to get on the property ladder. Combining two or more incomes can make mortgages more affordable and can help increase how much providers extend to you.

This article looks at how much you can borrow when applying with another person and how a joint application could affect the interest rate you are charged.

How much can you borrow on a joint mortgage?

On average, lenders extend four times a combined annual salary. However, there are providers that will go up to six times gross income. Lenders are starting to take a more nuanced look at applicants’ financial circumstances to calculate loan amounts. However, multiples can still be useful to gauge roughly what mortgage providers may lend to you.

As two applicants usually have a higher combined income than a solo applicant, you can usually borrow more on a joint mortgage. However, the exact amount will depend on how much you can both afford. Consequently, a joint mortgage may be higher for people who have fewer outgoings than for applicants with a lot of debt to service or other high monthly expenditures.

Enter both applicants’ combined income into our mortgage affordability calculator below to get an idea of the amount you can borrow on a joint mortgage.

What multiples can couples borrow at?

Here’s what your joint borrowing limits could look like with some hypothetical combined salaries:

If the rest of your situation and circumstances are positive enough, some lenders don’t have a multiple at all. This does not mean they will lend you an amount far higher than the average four times multiplier. Often, if they don’t have a maximum loan to income limit, it can simply be because their affordability calculation is so dependent on other factors.

This is when mortgage brokers can prove invaluable. They’ll know what lenders are looking for and which are best for you in terms of rates and loan amounts. They will maximise the amount you could borrow and improve the rate and the chances of you being approved too.

Calculating affordability

As briefly mentioned above, lenders look at how much applicants can afford to repay each month when calculating how much to lend and at what rate. How each lender calculates that affordability varies, but commonly they weigh up the following factors:

Annual income

In general, the more the combined income of joint applicants, the more lenders are likely to extend as subsequent higher repayments are deemed more affordable. When it comes to joint mortgages, lenders will often look more favourably on applications where at least one applicant has a good employment record.

The source of incomes also has a bearing on affordability calculations as some lenders stipulate what type of income they are happy to consider and what they aren’t. Finding a lender that considers all of your gross income will improve your chances of being approved for a higher amount and potentially a better rate.

Employed applicants will find that lenders will often take into account 100% of their basic annual income. Those who make an income through bonuses or commissions may find that lenders only accept a capped percentage of those earnings. Self employed applicants will often need to provide evidence of their earnings, often for at least three years, for lenders to extend a maximum amount.

Outgoings

The more outgoings you have the less a lender is likely to extend further borrowing to you. So if you have a great deal of credit card debt or other draws on your earnings, you may find that you and your fellow applicant can borrow less than others with the same gross income.

Lenders assess your earnings by offsetting them against your income to work out your debt-to-income ratio. There’s no set percentage it has to be to qualify for a mortgage, but keep in mind that anything over 45% is usually considered high.

You can use our debt-to-income calculator below to work out what yours is.

The future

As part of wider affordability assessments, a lender will want to ensure you and your fellow applicant will be able to meet repayments if there is a big difference to your income or expenditure in the future. Common factors they consider would be if you were to have children or if there may be an increase in interest rates resulting in higher mortgage repayments.

On the flip side, some lenders will consider a potential rise in income. So, for example, if one of the applicants is on a career break to raise a young family but will earn an income in the future, lenders may be more inclined to accept your application, or offer a higher amount.

Finally, age can come into play here as, if the mortgage runs into your retirement years, the lender will want to be confident that you will still have enough capital to repay the amount you have borrowed.

How a broker can help joint borrowers

Applying for a joint mortgage is a complicated process, particularly as lenders all use their own individual affordability assessment calculations. There are so many different variables at play that means finding the right mortgage provider can be difficult without help.

Using a broker can be highly beneficial as they will know the best mortgage providers to approach for you, specifically. They will consider all the subtleties to your situation and joint application. As a result, using a mortgage advisor can materially improve your chances of a successful application.

Importantly, using a broker can help you borrow as much as possible with the most competitive rates. That’s because an experienced advisor will quickly know which lenders use higher income multiples or are happy to accept supplemental income from sources other than a permanent, employed salary.

If you get in touch we’ll arrange for a broker we work with, who has experience in this area, to contact you straight away.

Eligibility criteria

Joint mortgage applications will need to meet a number of eligibility criteria. The experts we work with will ensure you only ever apply for products where you meet those requirements. However, in general, these are the common criteria that providers have in addition to affordability calculations, and they can have an indirect impact on the maximum amount you could borrow.

Deposit

Mortgage providers often want to see a deposit of at least 10% of the property price. However, some will accept an application with anything as low as 5%, depending on the situation. Usually, the higher the deposit you have, the better the rate you will be offered.

Age

Applicants (by law) need to be older than 18 and, usually, younger than 75. Some lenders may accept applications from people older than 75 in some cases. In the case of joint mortgages, if either of the applicants were aged below 18 or above 75, this would likely result in the application being declined.

Credit history

As asserted above, providers will invariably look more kindly on applications from those with good credit ratings. If one or more of the joint applicants has a poor credit record, you may find the rate you’re offered is higher or you’re asked for a bigger deposit.

Property type

Some lenders will only extend a mortgage for specific property types. For example, you may need a specialist lender if you are thinking of borrowing to fund a buy to let property purchase.

Speak to an expert about joint mortgages today

Knowing the best way to improve your chances of being approved for a joint mortgage is a tough ask on your own. There are so many different ideas to consider for both applicants that speaking with an expert can be a great way to reduce the risk, time and, sometimes, cost of getting a mortgage.

We offer a free, no-obligation matching service to put you in touch with the right broker for your situation. Call 0808 189 0463 or make an enquiry with us today so we can introduce you to the most suitable broker for your needs.