Salary Multiples

Jacka87

I am interested in a HBSC for a 5yr fixed mortgage. I have found the desired rate of 5.39% with no fees or valuation costs and I would be looking to borrow at an ltv of 75%.

I would like to know if anybody knows what sort of salary multiples HSBC use. I am able to borrow around 112k from a number of banks based on there online mortgage calculators however for some reason HSBC are only willing to lend 75k, would anybody know why this is so much lower for this bank in particular?

Mrs_Bumble

HSBC don't publish what their affordability criteria is and I suspect that is because they apply it on a case by case basis. What sort of salary are you on, do you have any other credit committments?

_Andy_

HSBC use an affordability model that is affected by credit scoring, give them a call and they will run through it with you and advise you how much you can borrow.

Framps

HSBC recently lowered there sole applicant multiplier to 3.5x, not sure about joint apps tho.

They too have an online calculator, which gives you a pretty reasonable idea of what they will lend - as it's my second post it won't allow me to include a link but go to their website and use the "get a mortgage quote" tool (the first part of which is a simple calculator)...

Jacka87

Well my basic salary is just over 23k but I get a 1k bonus as well, but I dont think they will include that in the calculation.

I know that I am looking for around 100-110k, which is a multiple of around 4-5%.

So if HSBC are only offering 3.5% then they will not be suitable. Tho I am confused as to why they only lend such a small mortgage multiple compared tp other lenders?

Jacka87

PS I have no credit card, car loans etc I also have no dependents or anything else like that. My job is pretty secure & I also am a recent graduate on a graduate programme, which ends in a yrs time, which means my salary is also likely to rise.

Mrs_Bumble

That is a very high income multiple that you are looking for and isn't common place for a reason. The repayments on a mortgage that size are going to be around the £750 per month, and by my reckoning that is about half your net salary.

That is why HSBC and most other lenders would be looking to lend around the 3.5/4 ish times salary mark.

Will you have any other income coming in once you purchase?

Jacka87

I appreciate that it seems a high multiple however a number of major banks have said that they are willing to lend me the amount required at that level of multiple, including RBS & BoS

It is not a new purchase but a re-mortgage, if that makes any difference.

I actually already have an income from flatmate(s) that brings in £450 however I have also been told this income is negligible and they wont consider it in the salary multiple. With this included I am very well capable of paying the mortgage. Infact I have been paying the mortgage as it stands every month and I am only looking to re-mortgage to get onto a long term fix. At present rates this will cost me £140pcm of which I am capable of paying, however if rates rise by 1.5% this extra cost will be negated which is why I want to fix as i feel they will rise much more than this.

Mrs_Bumble

That was what I was getting at really Jacka87 that you understood what you were taking on and could afford it long term, but you seem to have it covered:) Lending at that level you will be restricted to the lenders you have mentioned above and Halifax!

Jacka87

I do appreciate that I am borrowing a large amount in comparison to my monthly take homw pay, and it is going to be a bit more of a squeeze than I would like but increasing my amount by £140pcm is ok as its fixed and I can budget. If the BOE rate shoot up from where they are now to lets say 8% then my payments would be equivelent to all of my pay after tax, so I really do need to fix.

The best 4 deals where from HSBC, CO-OP, Leeds BS & Chelsea BS. Are any of these likely to lend near to 4or5 times my salary? Since nobody so far has accepted my rental income,even tho I have had it continuouslly since I moved in! If not then I will be forced to go with RBS who are the next best but they are going to cost me an extra £200pcm as opposed to HSBC £140pcm. On top of that they have big fees for me to pay which I dont need to find the money for with HSBC!

Jacka87

PS I have a meeting with HSBC now arranged for this afternoon. I am hoping they will either lend closer to the salary multiple or allow me to consider some of the rental income.

Either way by this afternoon I will either have ruled them out or will have started my application! Least that way I can find out what they say.