Updated: April 17, 2024
Maximum Mortgage Amounts
Need to know the maximum mortgage you can borrow? Find out about income multiples and what you can do to maximise your loan amount with our in-depth guide.
No impact on your credit score
Whether you’re buying your first home or looking to move, your maximum mortgage borrowing will vary hugely depending on your personal circumstances and which lender you go with.
In this article you’ll learn how different lenders calculate the maximum you can borrow, how to increase your borrowing capacity and things to consider when deciding whether taking out the maximum mortgage is right for you.
The following topics are covered below...
Calculating your maximum mortgage
Each lender has their own criteria and the maximum amount you can borrow will vary greatly from one to the next so you should always scour the entire market for the best deal according to your circumstances.
There are four main elements to calculating the maximum mortgage you can borrow. The first two – income and outgoings – have a direct impact upon the affordability assessments carried out by lenders.
The last two – credit reports and loan to value (LTV) – would have more of an indirect impact as these could reduce the number of lenders willing to consider your borrowing request.
Income
Most lenders apply an income multiple of 4.5 times annual salary to the majority of borrowers as standard to work out how much they’d be prepared to let them borrow. Others go as low as 3.5, while some have a more flexible approach.
Applications with a combined income above £60,000 pa can often benefit from enhanced income multiples.
Qualified professionals or those whose salary exceeds a minimum threshold (e.g. £200,000) may be eligible to borrow at 5.5 times their annual salary or more – even with some mainstream lenders.
With the right lender, newly qualified professionals can borrow up to six times their salary.
Income multiple examples
This table shows how increased income multiples can influence borrowing power:
| Combined borrower income | 3.5 times income | 4.5 times income | 5.5 times income | 6 times income |
| £20,000 | £70,000 | £90,000 | N/A | N/A |
| £30,000 | £105,000 | £135,000 | £165,000 | N/A |
| £40,000 | £140,000 | £180,000 | £220,000 | N/A |
| £60,000 | £210,000 | £270,000 | £330,000 | £360,000 |
| £100,000 | £350,000 | £450,000 | £550,000 | £600,000 |
| £200,000 | £700,000 | £900,000 | £1,100,000 | £1,200,000 |
You can see how this could work out for you, based on your own annual earnings by using our mortgage affordability calculator here:
Mortgage Affordability Calculator
Our affordability calculator can tell you how much you can potentially borrow from a mortgage lender. Simply enter your total household income below and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your household income, the standard calculation used by the majority of mortgage providers. To borrow more than this, you will need to use a mortgage broker to access specialist lenders.
Some lenders would consider letting you borrow
This is based on 5 times your household income, a salary multiple you might struggle to qualify for without the help of a broker. This income multiple is not widely available to customers who are applying directly with a lender.
A minority of lenders would consider letting you borrow
This is based on 6 times your household income, a salary multiple you will struggle to get without a broker. Six-times salary mortgages are usually only available under very specific circumstances.
Get Started with an expert broker to find out exactly how much you could borrow.
Borrowers with non-standard income
Self-employed borrowers or those with complex income streams reliant on bonuses, commission or significant, regular overtime may be restricted to a set percentage of overall income by some lenders.
Fortunately, there are lots of specialist lenders with a flexible approach to assessing income.
Some providers don’t use standard maximum income multiples and instead assess each application on its own merits.
Before looking into the different criteria and income multiples each lender uses, make sure you have a comprehensive list of all your income streams including:
- Wages
- Any other employed income
- Any self-employed income
- Investment income
- Benefits
Affordability – outgoings
Mortgage providers also check your outgoings to assess how much you can afford to pay.
Lots of unsecured debt and other existing financial commitments may prevent you from repaying a big mortgage and lenders could reduce the maximum amount they will loan to you.
Other factors affecting affordability include:
- Utilities
- Insurances
- Dependents
- Car finance
- Leisure/holidays
Your maximum mortgage may require you to make sacrifices and you must consider these first. For example, you may not want to give up your golf club membership or annual holiday to afford a bigger house.
Lenders will calculate affordability based on their risk profile. It is for you to decide what you can comfortably afford to repay. This is based on your debt-to-income ratio. There’s no set percentage it has to be to qualify for a mortgage but keep in mind that most lenders will consider 45% or over to be high.
Try our debt-to-income calculator below to work out yours.
Debt to Income Ratio Calculator
You can use our debt-to-income (DTI) ratio calculator to work out how much of your income is going towards your fixed outgoings, expressed as a percentage. Based on that percentage, this tool will tell you whether mortgage lenders will class your DTI as low, medium or high.
Your Debt to Income Ratio is %
Good news! Most mortgage lenders will class your debt-to-income ratio as low. You’re unlikely to be declined for a mortgage based on your outgoings, but speaking to a mortgage broker before applying is still recommended as they can improve your chances of getting the best deal.
Most mortgage lenders will class your debt-to-income ratio as moderate, which means some of them might view your application with caution. Some lenders are much more strict than others when it comes to affordability and debt, so it’s important for you to find a lender who’s more lenient. You should speak to a mortgage broker before you apply to ensure you’re matched with a lender whose criteria you fit.
Most mortgage lenders will class your debt-to-income ratio as high. But that’s where we can help! With so much of your monthly income going towards debt repayments, you could struggle to get approved for a mortgage without the help of a mortgage broker. We can help you find a lender who’s more lenient on debt and affordability, and could still secure a mortgage approval.
Credit report
Your credit history shows how creditworthy you are.
A good credit history makes you less of a risk and allows you to borrow closer to your maximum income multiple.
Bad credit won’t necessarily prevent you from getting a mortgage but it may mean fewer lenders would be willing to consider your application. It can also mean you pay higher rates which impacts affordability.
Loan to value
This is the amount you borrow expressed as a percentage of the property value.
For example, a mortgage of £150,000 on a property worth £300,000 would be a loan to value (LTV) of 50%. Lower LTVs are preferable to lenders as they provide greater security if you experience financial difficulties.
LTV can influence your maximum income multiple and, therefore, your borrowing capacity, but only indirectly as a higher LTV would mean fewer lenders willing to consider your application.
Some lenders will reduce income multiples to reflect a higher LTV (e.g.):
- 4.25 times salary for LTV up to 80%
- 4 times salary for LTV up to 90%
- 3.75 times salary for LTV up to 95%
These figures are for illustrative purposes only. Each lender has their own formula for calculating the maximum mortgage you can borrow.
It’s not uncommon for lenders to impose a maximum LTV based on the value of the loan and this can affect your borrowing capacity too. Some will go to a maximum of 75% LTV on loans in excess of £1,000,000.
The higher your LTV, the more likely it is your best deal will be with a specialist lender.
Get Started with a Broker
Maximise your chance of approval with specialist advice from a mortgage expert.
How a broker can help
The only way to make sure you get the maximum mortgage offer at the best rate is to compare all products on the market.
A whole-of-market mortgage broker will assess your circumstances and, using their industry knowledge and connections, quickly identify the best lenders for you.
They will advise on the maximum mortgage you can borrow from each lender and help you understand the technicalities of each so you make a fully informed decision about which is right for you.
Other factors to consider
When considering whether to apply for the maximum mortgage a lender will offer you, you should also consider the following:
Getting the best rate
If your maximum mortgage means borrowing at a high LTV, you are less likely to be offered the lowest interest rates. Sometimes, you are better to buy a less expensive property to avoid overcommitting yourself. With that said, even if affordability is not an issue, finding a specialist lender that suits your circumstances can save you a significant sum over the term of your loan.
Changes in circumstances
You will need to consider how you would cope with job loss, interest rate rises or any other significant change to your financial situation. Savings, investments and other properties that provide financial stability may be enough to persuade some specialist lenders that you have sufficient security to warrant borrowing your maximum mortgage.
Lenders apply their own ‘stress test’ when calculating affordability but, once again, their calculation is based on a mathematical formula and you need to give this considerable thought.
Outstanding credit
Credit cards and loans affect affordability. It might be possible to increase your borrowing capacity by using your maximum mortgage to consolidate debts and reduce your monthly outgoings.
Clearing your credit card debt before applying for a mortgage may help but not in every case, so best to consult with your broker. Even cards with a zero balance can influence your maximum mortgage as providers know you could spend on them at any time.
The term of your loan
If the monthly payments for your maximum mortgage over 25 years will be tight, look at borrowing over a longer term. You may be able to get a better rate and reduce the term when you come to remortgage.
Deposit amount
The Deposit amount has a direct impact on your LTV. Sometimes, finding a cheaper property can significantly decrease the LTV and allow you to borrow at a higher income multiple.
If a family member is willing to stand as guarantor, you can use their collateral to prop up your deposit and increase your borrowing power.
Number of people on the mortgage
Most lenders allow up to four borrowers. This helps increase the income and deposit while spreading the risk – making lenders more likely to lend a higher amount.
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Get matched with a handpicked mortgage broker
When stretching your borrowing capacity to its maximum, finding the right lender is crucial. Slight nuances can be the difference between acceptance and rejection. And a small difference in interest rate can have a huge impact on your monthly mortgage payment and overall cost of borrowing.
Our broker matching service will handpick you a broker who has a strong track record helping people like you secure the best deal possible. Using their deep knowledge of each lenders’ lending criteria they will help you find the maximum loan at the minimum rate.
Call now on 0808 189 0463 or enquire online to arrange a no-obligation chat.
Ask A Quick Question
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Pete Mugleston
Mortgage Expert, MD
About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!
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Mortgages Based on Three Times Income
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Getting a Mortgage 5 – 5.5 Times Your Salary