6x Salary + Mortgages

MysteryPunter

Hi all,

I am looking to buy my first property and will need a mortgage to do that. I have £50k saved for a deposit (plus extra to cover stamp duty, fees etc.). My annual salary is £65k. I have no dependants, loans, or other financial commitments. I have a strong credit report. I am happy to have a 30 year mortgage term. I intend to be the sole applicant.

I had assumed that banks would lend circa 4-5 times salary (i.e. £325k at max) - but having completed HSBC's mortgage calculator, they are suggesting that I could borrow £399k (i.e. over 6x salary) with an LTV of 80-90%. If I were to increase my deposit, they suggest I could borrow even more (423k).

Is this wishful thinking / an error? In peoples' experiences, are 6x+ mortgages from a conventional bank actually possible or am I wasting my time here?

Thanks,

MP

saverbuyer

MysteryPunter wrote: »

Hi all,

I am looking to buy my first property and will need a mortgage to do that. I have £50k saved for a deposit (plus extra to cover stamp duty, fees etc.). My annual salary is £65k. I have no dependants, loans, or other financial commitments. I have a strong credit report. I am happy to have a 30 year mortgage term. I intend to be the sole applicant.

I had assumed that banks would lend circa 4-5 times salary (i.e. £325k at max) - but having completed HSBC's mortgage calculator, they are suggesting that I could borrow £399k (i.e. over 6x salary) with an LTV of 80-90%. If I were to increase my deposit, they suggest I could borrow even more (423k).

Is this wishful thinking / an error? In peoples' experiences, are 6x+ mortgages from a conventional bank actually possible or am I wasting my time here?

Thanks,

MP

You'll not get to borrow 6x salary from HSBC. No chance. In fact I'd say they are the most conservative lender out there.

jaydeeuk1

When I applied for a DIP with our mortgage broker, wifes salary was £18k, mine was £15k plus near £30k dividends and all offered between £222k (natwest) to £185k, and our net pay would be higher than yours due to tax, so as above, no chance.

MysteryPunter

Thanks - exactly what I was expecting (though not necessarily wanting) to hear! They really should update their calculator to make it more realistic...

MP

Malmo

Just to confirm for the OP, loan to income multiples of 4.5+ are capped by the BoE on 15% of new mortgages lent by any individual lender (if they lend over £100m per annum). Individual lenders set their own caps within the Bank of England limits.

Thrugelmir

MysteryPunter wrote: »

They really should update their calculator to make it more realistic...

MP

Online calculators cannot be all singing all dancing. There are circumstances in which higher levels of borrowing will be granted. This falls out outside of the mainstream lending which is the bread and butter of mortgage lending.

bellaboo86

Not really relevant, but the thought of a mortgage 6 times my salary makes me feel a bit sick.

jonny_power

my experience is that HSBC are ruthless (we bank with them and they didn't touch us, and didn't explain why). We waltzed through our subsequent application with Santander and wouldn't ever bother going back to HSBC. They seem very tough.

Secondly, the calculators can be very misleading. I'd suggest getting a broker to run some numbers for you.