How much does my salary affect how much I can borrow?

autumnorinoco

Hi

This may seem like a silly question.... I have been multiplying my salary by three to work out roughly how much I can borrow. However, I am currently interviewing for two jobs - one which pays £35k and one which pays £38k. The actual difference in salary isn't much but does this really translate to £9k in terms of my mortgage or am I being far too literal about this?

THanks

Thrugelmir

The net difference is £170 per month.

On the basis that your living expenses are the same. Then this additional sum could be used towards a mortgage. Over 25 years it amounts to a net £51,000 of income on the higher salary.

staffie1

Also remember that the sum of any other personal debt you currently have will be netted off the total amount you can borrow.

powerwin

autumnorinoco wrote: »

The actual difference in salary isn't much but does this really translate to £9k in terms of my mortgage or am I being far too literal about this?

Lenders would normally lend three times salary, so yes, the greater salary potentially means £9k more of mortgage loan. If the lender is prepared to go to a higher loan to salary ratio, e.g. 3.5x, then that's an even bigger mortgage loan.

What you won't know is what loan to salary ratio a given lender will grant you.

Rgds