Realistic maximum able to borrow?

Prof_FrinkProf

Hi all,

I'm currently a homeowner, my house is worth approximately £300k and I have £120k left owing on it but I am overpaying this as much as possible every month. Since buying the house I have a long term girlfriend and we are looking to move in the not so distant future to somewhere larger.

My income is currently made up of £42k gross, plus £11k gross overtime. Her income is £29k gross. 

I'm trying to give us an idea of realistic and absolute maximum house budgets. Playing with the Natwest mortgage calculator it states I can borrow up to £400k based on my deposit being £200k. I doubt we would want to borrow this much, but how realistic is this? My overtime seems to make a big difference to this and I remember when I applied for my current mortgage with Skipton they would only consider 50% of my regular overtime.

My current interest rate is 1.64%, I realise with such a change in LTV the interest rates will increase.

Thanks!

kingstreet

The NatWest calculator assumes your OT can be evidenced over a long period, perhaps two years for all of it to be taken into account. Most lenders using 50% work from the latest three months payslips only. What you can borrow depends on the strength of your evidence of income.

ACG

All of the calculators are only as reliable as the information entered. By that I mean has it been as the lender would want. 
Can you get enough without the overtime? If not, can you get enough with 50% of it? If not, then it might be worth speaking to a broker as it can be easy to make a mistake. 

Prof_FrinkProf

Thanks kingstreet and ACG for taking the time to reply that's really helpful.

kingstreet said:

The NatWest calculator assumes your OT can be evidenced over a long period, perhaps two years for all of it to be taken into account. Most lenders using 50% work from the latest three months payslips only. What you can borrow depends on the strength of your evidence of income.

That insight is really helpful. I think I would only need to use 50% of my overtime which is good as it sounds like that's far easier to "prove".

ACG said:

All of the calculators are only as reliable as the information entered. By that I mean has it been as the lender would want. 
Can you get enough without the overtime? If not, can you get enough with 50% of it? If not, then it might be worth speaking to a broker as it can be easy to make a mistake. 

Playing with the calculator again I think you're right, 50% of my overtime would secure me a large enough mortgage. My current mortgage is £525pm, if I got the maximum mortgage based on 50% of my overtime this would be £800ish a month. That's certainly enough of an increase for me!