How much can we borrow?

smcqis

How many times our combined salary will a bank lend? and then we add our deposit to this and in theory this is the maximum house price we can buy?

Conrad

Depends on many things including;

1) The score they give you (not those muppet ones Experian et al give out)

2) Your level of income (higher the income = higher multiples)

3) Your deposit size in relation to the property

4) The monthly cost of loans and other credit commitments and a deduction for card payments

5) The legnth of the mortgage

6) Other outgoings such as divorce maintenance

Also many will not tell you a multiple as it is worked out by thier credit scoring system.

In very rough terms can be anythinbg from 2.5 to 5.5 x income.

The ONLY way you will know is by applying.
Some people say 'try some affordability calculators' but these are only very rough.

Thrugelmir

Alternatively work out what you can afford / commit to monthly mortgage repayments. Then see what this will allow you to borrow.

A mortgage is a long term committment. Overstretching oneself means less money to spend elsewhere. Best to keep a balance in life.

Gefjun

Don't just take what they tell you that you can borrow, use your judgement on what you're comfortable with.

We worked out our mortgage borrowing based on the fact we wanted to sleep at night. We could have borrowed 3 times the amount we actually did, but we've planned for the future as circumstances change - if you mortgage yourselves up to the hilt and things change (babies/job loss/split up). Since taking out our mortgage, I've lost my job twice and had to take a 60% pay cut, and I'm pregnant (which was the only bit which was planned) but we're still ok as we made sure we could live on one wage.

Find a broker who searches the whole of the mortgage market (not just a panel of lenders) and they'll be able to run through the best products - like Conrad says, different lenders will lend different amounts so you don't really know until you go and ask.