Whats the Most you can borrow...?

villa2010

Hi all,

What is the most amount you can borrow from a bank for a mortgage. Is it 3.5 times your salary or can you get up to 5 times your salary.

Would you be able to add your deposit in or is that including your deposit...?

graziaz...!

villa2010

Any view or advice will be welcome...?

rising_from_the_ashes

It depends on the lender, the amount you want to borrow (LTV rate), whether it's a single or joint application, if you bank with them etc.

Some lenders still lend 5 x but very rare nowadays.

As an example, my bank's "standard" multiple is 3.5 times but I can borrow 4 x as I bank with them.

I don't understand what you mean by including your deposit - this is totally separate from your mortgage and you must pay it from other funds.

Very basic example below:

Annual salary = £20k
Purchase price = £100k

Deposit (20%) = £20k
Mortgage (4 x salary) = £80k

HTH

rising_from_the_ashes

villa2010 wrote: »

Any view or advice will be welcome...?

Give people time to answer!:eek:

It's a nice evening, around dinner time and also during the holidays!:)

ali-t

When I went on the mortgage calculater for my bank I was offered nearly 4X my salary and that was without telling them I banked with them or hold a mortgage with them just now. I then phoned to get it confirmed and have been offered 5X my salary. I guess it just depends!

Thrugelmir

villa2010 wrote: »

Any view or advice will be welcome...?

You will be offered what the lender considers you can afford.

There's not a one size fits all calculation ..............

villa2010

rising_from_the_ashes wrote: »

It depends on the lender, the amount you want to borrow (LTV rate), whether it's a single or joint application, if you bank with them etc.

Some lenders still lend 5 x but very rare nowadays.

As an example, my bank's "standard" multiple is 3.5 times but I can borrow 4 x as I bank with them.

I don't understand what you mean by including your deposit - this is totally separate from your mortgage and you must pay it from other funds.

Very basic example below:

Annual salary = £20k
Purchase price = £100k

Deposit (20%) = £20k
Mortgage (4 x salary) = £80k

HTH

for example if i wanted to buy a house for 120k

Annual salary = 20k

Savings 20 k

Is the deposit included in the LDV...?

Peter_L

villa2010 wrote: »

for example if i wanted to buy a house for 120k

Annual salary = 20k

Savings 20 k

Is the deposit included in the LDV...?

In your example House Cost less deposit = £100k to be mortgaged which is x5 your annual salary which is doable but as suggested is at the discretion of the lender.

It's not as simple as that though as they will need to take into account your outgoings and commitments and work out your 'affordability' for your mortgage

HTH

villa2010

Peter_L wrote: »

In your example House Cost less deposit = £100k to be mortgaged which is x5 your annual salary which is doable but as suggested is at the discretion of the lender.

It's not as simple as that though as they will need to take into account your outgoings and commitments and work out your 'affordability' for your mortgage

HTH

Thanks for the reply.

So on average would you say that I be able to afford a 120 k house.

If I earned 20 k and had 20 k deposit.

5x20=100

100+20= 120 k

Or would that 20 k need to be included in the 100 k...?

On average...?

The_Palmist

It will be in your own interest not to borrow 100K on your current salary.

You should either wait till you get a pay rise or look for a cheaper house.

100K mortgage will mean roughly £470-£525 monthly payment.
20K salary means roughly money coming in after tax etc £1200 or so.

Also you will have no margin in case interest goes up. Keep in mind for about 1% rise, your monthly payment could rise by about £50 or more.

Do not borrow any more than 70k - 75k

The_Palmist

I have assumed you will be the one responsible for payments.