What Income for a £100k Mortgage?

stone7

My son is looking to buy his first house in the near future. He'll have a £40k deposit and would be looking at properties in the £140k region. What yearly income would he need to be on to get the £100k morgage?

Is there a website for such calculations?

TIA.

Bossypants

The way I did it way back when was to go to the websites of a couple of the big high street lenders. Most of them have a 'how much can you borrow' calculator which lets you put in your salary, size of deposit the term of the desired mortgage, etc, and then spits an approximation based on that. Obviously to be taken with a grain of salt in all cases, but it gives you a reasonable idea.

HSBC's used to be good if I remember correctly.

stone7

Tesco do a good calculator.... there's even an MSE one. Who knew?

Does the fact my son has a £40k deposit influence a lender's decision to provide the other £100k?

e13

It should make life a little easier as the rate they'll want to charge will be lower (lower LTV ration), so it'll make it easier to pass the affordability checks.

Lenders will lend up to 4.5x your income - so likely round the 22k mark.

He'll have to remember to tighten his belt a few months before applications, as some places have some quite strict affordability criteria - eg the fact that he wouldn't take an expensive holiday if his mortgage rate went up could count for nothing if he took one before applying for the mortgage. (But not definite - all lenders are different.)

Super_Whiskey

At the moment, your son would have a 71% LTV so it would improve his position to see if he can find the extra £2,000 or so to hit the 70% banding. It reduces the amount he has to pay back and reduces the bank's risk!

A guideline is about 4x income so £25,000 but as other's have said, use calculators on a couple of banking websites to get an idea.

kingstreet

I got an output of £102k on one lender's calculator yesterday for someone earning £21,750.

The term was 35 years.

He had;-

no credit
no ground rent & service charges
no dependents
no maintenance payments
no student loan payments
no season ticket or other employer loans.

You need to establish outgoings moreso than income.