Salary multiples for mortgages

longtimelurker2020

Hi guys I asked this question on the 'ask me anything' thread but it was not answered.

Does anyone have info on this / are any of the other brokers able to answer:

A post before mine (on the other thread) asked about 5x salary lending, the broker's answer referred to average/high salaries, and my (amended) follow up questions were: 
a) what salary ranges would mortgage lenders define as ‘average’ and as ‘high’? 
b) is the 5x multiple reserved for certain professions earning said high salary (e.g. solicitors, doctors) or any profession with that level of earning would be considered for 5x?

I appreciate the situation is dynamic at the moment and lender criteria appear quite fluid, but it would be good to know what the thinking is. 
Thanks 

ritz55

There are banks that will go to 6 x salery but only via a good broker. 

longtimelurker2020

ritz55 said:

There are banks that will go to 6 x salery but only via a good broker. 

Thanks, would this be for certain professions? I read somewhere about solicitors (for example) being offered mortgages at higher multiples than the norm, but I can’t remember where I saw it. 

emma_829

longtimelurker2020 said:

ritz55 said:

There are banks that will go to 6 x salery but only via a good broker. 

Thanks, would this be for certain professions? I read somewhere about solicitors (for example) being offered mortgages at higher multiples than the norm, but I can’t remember where I saw it. 

I have also read that, but I’m not sure how realistic that really is and I can’t imagine it applies at the moment. Not all solicitors or lawyers are employed, we don’t all earn ‘high wages’ although granted most above the uk average, so it’s not a standard one size fits all criteria for the profession. It would be assessed case by case as for anyone. I know my mortgage was assessed using the standard multiplier. The only reason I could see it as being a potential benefit is due to the fact that any practicing legal professional can’t be made bankrupt. If they do their licence to practice is automatically suspended and they have restrictions placed against them professionally. As such, they can be seen as lower risk individuals as they’re more likely to keep up with payments. 

[Deleted User]

Years ago when I was a young solicitor, I got a mortgage with Scottish Widows as they were prepared to lend on an income that “would be likely” in the near future and not on current income. But that was in the 90’s when you could borrow pretty much what you wanted with a decent deposit. Things have changed so much know with the MMR ( mortgage rules after the 2007 banking crash) , I dont know their current practice. 

haras_n0sirrah

longtimelurker2020 said:

Hi guys I asked this question on the 'ask me anything' thread but it was not answered.

Does anyone have info on this / are any of the other brokers able to answer:

A post before mine (on the other thread) asked about 5x salary lending, the broker's answer referred to average/high salaries, and my (amended) follow up questions were: 
a) what salary ranges would mortgage lenders define as ‘average’ and as ‘high’? 
b) is the 5x multiple reserved for certain professions earning said high salary (e.g. solicitors, doctors) or any profession with that level of earning would be considered for 5x?

I appreciate the situation is dynamic at the moment and lender criteria appear quite fluid, but it would be good to know what the thinking is. 
Thanks 

Sorry- I can miss replies on the other thread. At the moment to get 5x you are probably looking at an income of around 50k plus. One thing that has tightened since march is the calculators. Most mainstream lenders are now 4.5-4.75 x income. As I say for higher salaries it can go higher but it is difficult to say where the cut off is but in my experience it seems to be around the 50k where some lenders get more generous 

Seashell517

A little bit of research that I did (might not be up to date, but I did remove a few lenders recently who stopped doing 5x)...

Halifax / Scottish Widows: 4.75x (5.00x if income >=£50K) @ 0-75%

Virgin Money: x4.49 self-employed or a contract worker. For all other loans a maximum loan to income multiple of x5 applies.

Teachers BS: Max 5x LTI. All income should be annualised.

West Brom BS: 5 x main income where allowable income > £50,000 p.a. Multiples above 4.5 x will be capped at 85% LTV

Ipswich BS: Generally we don't exceed 4.5x income. If you have an application over this we will consider on a case by case basis

ritz55

longtimelurker2020 said:

ritz55 said:

There are banks that will go to 6 x salery but only via a good broker. 

Thanks, would this be for certain professions? I read somewhere about solicitors (for example) being offered mortgages at higher multiples than the norm, but I can’t remember where I saw it. 

I don't believe that's the case. I'm in IT and was offered it although needed just over 5x in my case

longtimelurker2020

Thanks guys,

@Seashell517 thank you for taking the time to research and post the detailed info. As a Londoner my view of high salaries is probably distorted! I was thinking £120k plus (and gnawing anxiously at my fingernails), so it’s good to get a sense of what the reality might be. What does annualised mean, pardon my ignorance but aren’t teachers on contracts that state what their annual salary is? 

@emma_829, makes sense, with their careers at stake I can see why regulated professionals would be viewed as lower risk 

@Densol yes I think I’ve read about earning potential being taken into consideration. I suppose certain professionals rank high on the employability list e.g. those in the medical profession, who wouldn’t be expected to be out of work for too long and so possibly present a lower risk of prolonged defaults in the event of job loss 

@haras_n0sirrah no worries, that’s an epic thread you’ve got going there so not surprised some questions get missed. I’m amazed you have the patience to reply to everyone. What’s your exit plan?! Or you’ll be answering questions for the next few years...

@ritz55 although IT isn’t a regulated profession it could be that you qualify for high multiples because your industry also ranks high on employability? (re my response to Densol) 

haras_n0sirrah

longtimelurker2020 said:

Thanks guys,

@Seashell517 thank you for taking the time to research and post the detailed info. As a Londoner my view of high salaries is probably distorted! I was thinking £120k plus (and gnawing anxiously at my fingernails), so it’s good to get a sense of what the reality might be. What does annualised mean, pardon my ignorance but aren’t teachers on contracts that state what their annual salary is? 

@emma_829, makes sense, with their careers at stake I can see why regulated professionals would be viewed as lower risk 

@Densol yes I think I’ve read about earning potential being taken into consideration. I suppose certain professionals rank high on the employability list e.g. those in the medical profession, who wouldn’t be expected to be out of work for too long and so possibly present a lower risk of prolonged defaults in the event of job loss 

@haras_n0sirrah no worries, that’s an epic thread you’ve got going there so not surprised some questions get missed. I’m amazed you have the patience to reply to everyone. What’s your exit plan?! Or you’ll be answering questions for the next few years...

@ritz55 although IT isn’t a regulated profession it could be that you qualify for high multiples because your industry also ranks high on employability? (re my response to Densol) 

I have limited to answering questions once a day as it was getting a bit too time consuming while I am also working so I just answer the days questions of an evening. While people are interested I will still respond and I have had a few people contacting me for help on their mortgages so I am happy to continue.

fred246

I borrowed 6x this millennium. The mortgage broker said I was "tight enough" to cope with it. However when she asked me to sign the paperwork she had adjusted my income. I had access to easy overtime so even though I wasn't earning the figure it was easily achievable if needed. We had a fixed rate for the first five years and took the opportunity to overpay down to a more standard multiple. It's OK if you understand the dangers of what you are doing. It was a 25 year mortgage and we paid it off in half the time.