How much can I borrow for a mortgage?
Andy SheadWhen it comes to getting your first home, one of the biggest barriers to homeownership is often being able to borrow enough to afford the size or type of property you want. There are two factors which reduce a lot of first-time buyers’ mortgage affordability: their house deposit size and their salary. This is because earnings, which impact both how much you could save each month and how much lenders will consider offering to you, have not kept pace with house prices over the decades.
So how do you work out how much house you could afford, and how much you could borrow for a mortgage? Most lenders will offer between 4 and 4.5 times the borrower's annual income, though the exact amount depends on factors like debt levels, deposit size and credit history. One of the easiest ways to get a quick estimate is to use a mortgage affordability calculator. In this guide, we'll walk through how mortgage lenders usually work out affordability, as well as ways to boost how much you could borrow.
Key takeaways
- Most lenders offer between 4 and 4.5 times your annual income, though this depends on factors like debt levels, deposit size and credit history
- Lenders assess more than just salary; your debt-to-income ratio, credit score, deposit size and monthly outgoings all play a role in affordability
- Family support options like Income Boost and Deposit Boost can help you borrow more, even on a single income or after a divorce
- If family support isn't available, alternatives like Shared Ownership, private equity loans and specialist professional mortgages can still help you get on the ladder
Find out what you could borrow
Your borrowing potential depends on more than just your salary. Explore personalised mortgage options, affordability insights, and schemes that could help you get on the ladder.
How much can I borrow for a mortgage?
How much can I borrow based on my salary?
As a rule of thumb, most mortgage lenders will offer a loan of 4-4.5 times your earnings, so if you earn £20,000, this means in theory you could be lent up to £90,000 to buy a home. If you buy with a partner, sibling or friend, the amount you could borrow would be based on your combined income.
It's also worth keeping in mind that lenders want to see that monthly mortgage repayments are comfortably affordable relative to your gross monthly income, so it's not just about the total loan size; it's about what you can realistically repay each month, too.
For example, if you and your partner had a combined income of £50,000, you could theoretically be lent up to £225,000. However, the income multiple is just a starting point. Lenders also assess a range of other factors when determining how much someone could borrow, including:
- Debt-to-income ratio (DTI): This compares total monthly debt payments (such as credit cards, car finance, student loans) against gross monthly income. A lower DTI generally means a borrower can qualify for a larger mortgage.
- Credit score: A strong credit history could unlock better rates and higher borrowing limits.
- Deposit size: A larger deposit reduces your loan-to-value (LTV) ratio, which could improve the rates available to you.
- Monthly outgoings: Regular expenses like childcare, subscriptions and other commitments all factor into what lenders believe is affordable.
Luckily, there are affordability-boosting solutions out there that could help you increase your buying potential, something that here at Tembo we specialise in. In the table below, we give a few examples of how a higher borrowing capacity could increase the mortgage size you could be offered:
| Household income | Standard mortgage (up to 4.5x income) | Boosted mortgage (5.5x income upwards) |
|---|---|---|
£30,000 | £50,000 | £80,000 |
£135,000 | £225,000 | £360,000 |
£165,000 | £275,000 | £440,000 |
These affordability-boosting solutions include family-assisted and guarantor mortgage options, such as Income Boost, Deposit Boost and family springboard mortgages, where your family could help boost the amount you can borrow.
Because so much of the UK's property wealth sits with the over-55s, many families are actually in a stronger position to help their children onto the ladder than they might realise. This method of family-supported homeownership is becoming increasingly more popular as the stigma around the Bank of Mum and Dad continues to fade.
Read more:How to talk to your family about money, inheritance and mortgage support
“Kirsty overcame all the challenges I thought were impossible to solve…we are now proud homeowners!”
Phineas was told that he would have to wait 2 years to buy a home. With Tembo, it took just 5 months.
Phineas, Tembo Customer
If you are unable to get family support to boost your mortgage affordability, there are also other schemes available to help you get on the ladder sooner. This includes Shared Ownership, which is a part buy, part rent scheme that allows you to gradually own more and more of a home over time.
Find your best mortgage options from +100 lenders
No two homebuying journeys are the same, which is why speaking to a mortgage expert can help you understand the best option for you and your circumstances. At Tembo, our mission is to make homeownership more accessible and achievable for everyone.
How can I afford a house after a divorce?
There are several ways to afford a home independently after divorce or separation, even if the prospect feels daunting at first. Options include getting family support to boost mortgage affordability, such as using a guarantor mortgage option like an Income Boost or a gifted Deposit Boost.
If you don’t have family who can help you, and a normal mortgage doesn’t give you the borrowing power you need, there may still be other options. For example, if you work in a “professional” job like an accountant, or you’re a key worker, some lenders may offer you a mortgage equivalent up to 5.5x your income.
Whether you need to remove a name from a joint mortgage or work out a way to increase your own borrowing power, Tembo can help. We advise on a wide range of options from over 100 lenders and budget-boosting schemes, helping you find a path that fits your situation, so you can move forward and own your home in your own right. Complete your details online with us today to get started.
How to afford a house on a single income?
Buying a home on a single income is absolutely possible, even if it might feel out of reach at first. There are several options out there designed to help solo buyers or single-income households get on the property ladder. These include family-assisted mortgages, for example, adding a family member to the mortgage to boost your overall combined salary.
This is called a Joint Borrower Sole Proprietor mortgage, but we call it an Income Boost. An Income Boost allows you to increase your borrowing potential thanks to the additional income of your loved one. They won't be on the deeds of the property, meaning there's no stamp duty liability, and you will still be the owner.
What is an Income Boost (a.k.a Joint Borrower Sole Proprietor mortgage)?
Another way a family member can help boost your borrowing capacity is through a gifted deposit. One way of doing this is through a Deposit Boost, which allows a family member or friend to unlock a portion of money from their own property through a small mortgage and gift the amount to you to boost your house deposit.
With a larger house deposit, you could get a mortgage with lower interest rates, which can decrease the monthly payments. Keep in mind that your family member would need to afford the small mortgage taken out on their property, and make the repayments each month.
What is a Deposit Boost mortgage?
Getting a mortgage with family support may become increasingly popular as the rising cost of living impacts people’s ability to get a standard mortgage themselves. So if you’re looking to buy by yourself or on a single income, it’s worth exploring how your family could help you get on the ladder.
If you don’t have family who can help, there are other options to boost your mortgage affordability as a single person or on one income:
- Shared Ownership schemes: A part buy, part rent approach that makes homeownership more accessible.
- Specialist professional mortgages: Some lenders offer enhanced terms for professions such as lawyers, vets and doctors.
- 5.5× income lending: Certain lenders will offer higher income multiples for borrowers who meet specific eligibility criteria.
We've helped thousands discover how they could afford their dream home
See how Tembo could help you today. Get a personalised recommendation in 10 minutes by creating a free Tembo plan. You can also book a call with one of our specialist mortgage brokers to talk through how you can boost your borrowing power and get your dream home.
