Can the amount you can borrow be effected by the size of your deposit?

evosy1978

Hey all.

Our joint income is £32000. We have £35000 deposit. What can we borrow?. Is it 3 times £32000 which is £96000. Does the fact that we have £35000 deposit mean we can borrow more? A bit confused. We would like to buy a house that is £130000...

Any help thanks.

BoGoF

Different lenders will have different income multipliers. It will also depend on other debts you may have.

Leon_W

Can the amount you can borrow be effected by the size of your deposit?


To a certain degree it can. Some lenders will lend slightly more if the Loan To Value (LTV) is lower, but don't get me wrong, I'm only talking slightly more.

The fact is that if you earn £10,000 then, whether you are putting down a deposit of £10k or £1million, a mortgage of only about £40k is deemed affordable.

Some lenders also have different income multiples or affordability calculations based on income bands. The higher the income the greater the multiple.

somethingcorporate

Basically you can afford to buy a house for (depending on lender): 4 x earnings + deposit although at these levels it can be a stretch so going for £130k house on £32k with a £35k deposit you fall comfortably within this bracket.

nomoneytoday

Some look at various multiples, others look at your income and expenditure.
There should be decent offers at an LTV of 75% though

evosy1978

Thanks for the replies.

I have no other debts.

So hopefully, if the house is £130000, deposit of £35000, Then ill get a mortgage for £95000?

Just want to say aswell, Im the main earner and im self employed.

Thanks again..