How much can I borrow for a mortgage?

s34rle

Hi All,

I’m thinking of purchasing a property but I’m worried me and my partner don’t earn enough as a couple to qualify for the amount we need to borrow. London is not cheap.

Do all lenders just work off the x4.75 calculator?

In an ideal world we would like to be looking at properties in the £325-£350k region but we only earn £50k as a couple.

We would however have about £100k in a form of a deposit (50k equity, £50k savings) Would this help us to borrow more?

Appreciate your time in replying.

Thank you

datlex

Simple answer is no not all of them work on 4.75. Halifax do. Not sure who else does.

s34rle

Are there any lenders that work off repayment calculations?

Purchase price £325,000
Deposit amount £82,000 (25%)
Mortgage amount £243,000

3 year fixed rate 1.73%
£998.32 (25 years)
£771.71 (35 years)

Based on those figures, considering we take home over £3k between us it would be comfortable.

yrnm

You're better off asking the question on the mortgage forum.

Use this calculator below to give you an idea, but lenders 'generosity' varies... and also the answer depends not only on income, but also on other things like credit card/loan debt, childcare costs, etc.

resources.barclays.co.uk/mortgage-calculators/residential-affordability

letitbe90

Different lenders use different multipliers and will also usually be a sliding scale based on LTV.

Generally most people should be able to get the 4-5x multiplier of income even with debt/liabilities if they are open to increasing the mortgage term. I had ~£25k debt but Halifax were happy to give me 4.5x on 95% LTV basis on a 35 year term mortgage.

s34rle

I have posted this in the mortgage section, thanks for the heads up.

We have 0 debt between us and no children. It just seems mad that a couple both earning £25k each can’t buy a £350,000 flat when they are prepared to stump up £100k as a deposit.

Every calculator I’ve tried just gives me the same generic answer. “You only earn 50k so obviously you can’t afford the £900 repayments.... go rent it instead for £1400” ��

Lokolo

That's because interest rates are at an all time low. If they were higher, the repayments would be a lot higher and it goes into realms of unaffordability.

The multiplier is basically the limit of the risk the banks are willing to accept.

jennhg88

How about having a free consultation with a broker to get an idea of the numbers?

quantumlobster

s34rle wrote: »

I have posted this in the mortgage section, thanks for the heads up.

We have 0 debt between us and no children. It just seems mad that a couple both earning £25k each can’t buy a £350,000 flat when they are prepared to stump up £100k as a deposit.

Every calculator I’ve tried just gives me the same generic answer. “You only earn 50k so obviously you can’t afford the £900 repayments.... go rent it instead for £1400” ��

Well, there's your answer. You're clearly too risky.

And I agree, TBH. £250K loan means you need a 5x multiplier. That's just insane.

You've got a combined monthly income of £3K, but the problem is that neither of you could comfortably service the mortgage and the household bills on your own (let's assume that there's a lump of about £1500 for utilities, phone, internet, food, transport, insurance, flat service charges, clothes, holidays, etc - basically all your other outgoings) and that, and the extreme vulnerability to interest rate changes, is where the risk comes from.

s34rle

That’s a fair comment however I could get a 10 year fixed rate deal at the following repayment values
£1070 25 year
£848.01 35 year

The fact the banks offer a 10 year mortgage at 2.34% tells me the rates won’t rise to levels seen before any time soon.

s34rle

That’s a fair comment however I could get a 10 year fixed rate deal at the following repayment values
£1070 25 year
£848.01 35 year

The fact the banks offer a 10 year mortgage at 2.34% tells me the rates won’t rise to levels seen before any time soon.