How much can I borrow

chockydavid1983

Hi everyone

I am trying to figure out how much is the maximum possible amount I would be able to borrow for a mortgage.
I've done the quick calculations on various sites and they seem to come up with about 4 times my salary.
However, which places are likely to offer you the most and will such a check go on my credit file?

Regards,
Chris.

samlee0211

I bank with abbey and they will lend me 5x salary, but thats with a 20k deposit and no outstanding debt or credit arrangements

Hello123_2

chockydavid1983 wrote: »

Hi everyone

I am trying to figure out how much is the maximum possible amount I would be able to borrow for a mortgage.
I've done the quick calculations on various sites and they seem to come up with about 4 times my salary.
However, which places are likely to offer you the most and will such a check go on my credit file?

Regards,
Chris.

It depends on so many things. It's not just a flat rate for everyone.

The higher calculations (eg 4-5x salary) tend to be for those with very good credit ratings, large deposit, lower LTV, generally 'better' applicants, higher earners.

Lower calculations (eg 2-3x) tend to be for FTB, those with a little deposit and therefore higher LTV, perhaps not as good credit score, generally more risky, lower income.

It is not necessarily a good thing that a lender will lend say 4 x your salary because you might not get as good a rate and it may also mean you are more stretched and therefore more prone to get into problems.

An advisor once told me you shouldn't be spending more than 1/3 of your earnings on your mortgage and I think think is very wise.

Also remember the quick calculaotors on the websites do not take into account personal factors as above.

If you really want to know, call around a few lenders that appeal to you and find out! They won't carry a credit search on you for enquiring!

chockydavid1983

Interesting, thanks for the info.
I am a FTB (hopefully!) but I would have a sizeable deposit and hence probably fairly low LTV and no outstanding debts or loans (other than student loan) so I guess I have a good chance of being lent more, although as you say, this may be at a higher rate.
Regarding the mortgage repayments not being more than 1/3 of you earnings, this sounds sensible if perhaps a little too cautious (I would probably look a bit higher than this so maybe 2/5).
Is there a quick calculator I can go to somewhere to find out what my theoretical monthly repayments would be given a loan of X at rate Y please?
I think I will contact some lenders about what I could borrow also.

Regards,
Chris.

GMS

Try a few lenders affordability calculators. Not always 100% accurate but it would give an indication.

Alternatively get a broker to look for you.

Hello123_2

chockydavid1983 wrote: »

Interesting, thanks for the info.
I am a FTB (hopefully!) but I would have a sizeable deposit and hence probably fairly low LTV and no outstanding debts or loans (other than student loan) so I guess I have a good chance of being lent more, although as you say, this may be at a higher rate.
Regarding the mortgage repayments not being more than 1/3 of you earnings, this sounds sensible if perhaps a little too cautious (I would probably look a bit higher than this so maybe 2/5).
Is there a quick calculator I can go to somewhere to find out what my theoretical monthly repayments would be given a loan of X at rate Y please?
I think I will contact some lenders about what I could borrow also.

Regards,
Chris.

This is quite a handy calculator: http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Otherwise use the ones on the lenders main sites.

Just remember rates may go up in the future, so make sure you can cover payments.

Tell us a little more about your salary, deposit, house value & general situation.

Good luck!

chockydavid1983

Hi,

Thanks for your replies.

A few more details about my situation:
Salary 23k
Savings 40k
Potential house value 200k (looking to buy in Oxford so this is a minimum, would ideally want a house so probably more like 250k)

To be honest, judging by your replies and some general research I've been doing, it's better for me to forget about getting a mortgage until my salary significantly improves.
What would you be looking to do in my situation? I currently house share so am able to save quite a bit per month, probably around £500-600.

Regards,
Chris.

kingstreet

With an absolute maximum of 5x income available from just two lenders in the marketplace, you need to increase your income, or increase your savings, or both, if you plan to buy around the £200k mark.

5 x £23k is £115k + £40k deposit means a maximum purchase price of £155k. You don't say if you have funds to meet other costs and fees?

Hopefully the numbers speak for themselves...

chockydavid1983

Thanks, that's pretty much what I thought :-(.