A mortgage - salary multiples?

SomeoneFromReigate

Hi

As first time buyers with a large deposit what multiple of our salaries can my partner and I reasonably expect to be offered by a building society or bank?

We both earn under £50k a year.

Thanks in advance for any advice.

Emmia

I'd expect 3x - 4x salary usually.

This calculator should give you a guide, but different lenders may have different lending approaches / eligibility criteria

https://www.moneysavingexpert.com/mortgages/how-much-mortgage-borrowing/

amnblog

SomeoneFromReigate will be looking to spend several hundred thousand to stay in the area and a lot will depend on your definition of a large deposit and how far under £50,000 a year your 'income' or 'incomes' are.

Give us your salaries and deposit figure and we can give you a clue.

Newbie_John

Less than £500k.

ACG

General rule of thumb is 4.5x income. 
However:
It could be lower if you have kids, debt, commitments or a term of maybe 20 years or under. 
It could be higher if you work in certain industries and are expecting large pay rises in the coming years. 

Speak to a broker, they will give you an accurate idea based on your circumstances or you could try a couple of affordability calculators. But a broker will be able to answer a million and one other questions you might have along the way. 

Emmia

ACG said:

General rule of thumb is 4.5x income. 
However:
It could be lower if you have kids, debt, commitments or a term of maybe 20 years or under. 
It could be higher if you work in certain industries and are expecting large pay rises in the coming years. 

Speak to a broker, they will give you an accurate idea based on your circumstances or you could try a couple of affordability calculators. But a broker will be able to answer a million and one other questions you might have along the way. 

4.5x income is higher than I'd go on a salary of less than £50k - I'd be thinking carefully about the reality of servicing that mortgage vs living life / having money left over to save or make home improvements.

It's also important to consider your actual take home (net) pay and the proportion of that the mortgage will take up after costs like commuting / pension contributions vs. your straight gross salaries.

ACG

Emmia said:

ACG said:

General rule of thumb is 4.5x income. 
However:
It could be lower if you have kids, debt, commitments or a term of maybe 20 years or under. 
It could be higher if you work in certain industries and are expecting large pay rises in the coming years. 

Speak to a broker, they will give you an accurate idea based on your circumstances or you could try a couple of affordability calculators. But a broker will be able to answer a million and one other questions you might have along the way. 

4.5x income is higher than I'd go on a salary of less than £50k - I'd be thinking carefully about the reality of servicing that mortgage vs living life / having money left over to save or make home improvements.

It's also important to consider your actual take home (net) pay and the proportion of that the mortgage will take up after costs like commuting / pension contributions vs. your straight gross salaries.

I think it depends. 
I did 4.5x my income on my first home in 2012. Even with that I could only afford a doer upper. Any less and I would not have been able to buy anything even remotely close to the area I wanted to live in and that was with a 15% deposit. 

I had no debt, no kids and it was fine. Within 2 years my income had gone up 50%, so it became even easier to manage. And then my gf moved in and we were loaded.

Then the kid came and childcare and the bigger house in the nicer area and then it all goes downhill haha. 

If you are in a role where you expect your income to increase I dont think it is a problem stretching yourself. I am 40 now and I would not do 4.5x my income as I cant see my income increasing any time soon.