How much do u need to be earning to get a £250,000 Mortgage?

mmbecks7

Hi

I have been wondering for some time on what basis do banks calculate the amount u can lend. Is it 3x your salary? Or is that the 'old way' of doing it? If u wanted to buy a property in London for about £250,000 what should ur earnings be?

I'm new to this, so forgive me if this is a stupid question!

Thanks!!

irishwench69

Hi mmbecks7 :wave:

You'd really be better looking at it the other way round, i.e what you're earning now, and what you'd be able to afford on that.

Also make sure you look at:

Other outgoings / financial committments (loans, credit cards etc)
Other people - are you buying with someone else?
Deposit - do you have anything to put towards the place, or are you looking for 100%?
Fees etc - you will need money for stamp duty (£250k is the threshold for 3% duty - maybe look at just under this e.g £240k, or somewhere where it's paid for you, i.e a new build), legal fees etc.
Also, for a large LTV (loan to value) - usually above 90 - 95% (can be as low as 75%!) you have to pay an extra fee called a higher lending fee. This is normally another couple of thousand.

HTH - good luck!

IW x

zag2me

Just as an estimate you would need to earn around 60k and have a sizeable deposit to get that size of mortgage.

But remember the majority of houses are purchased by couples, so it would be much less between them, so maybe 30-40k each.

toonfish

you could raise this potentially on a salary of around £40K but I wouldn't suggest this is a good idea. I think it is always safest to work backwards i.e. decide how much you can afford to pay per month and then see how much you can borrow for this amount.