What is the maximum mortgage I can borrow?
Probably the single most question I’m asked is: “what is the maximum mortgage I can borrow?”
First there is a sense check and as the respective Lenders’ income multiples range between 4 to 5.5 times combined income. However, I have the means to drill down into far more detail using a Broker tool that references over 30 of the main UK Lenders.
Here are some of the factors which influence the outcome:
- Next time buyer, first time buyer and remortgage.
- Age and term.
- Number of financial dependents (adults as well as children).
- Employee, Contractor, Company Director and Sole Trader; and for how long?
- Percentage of deposit / equity.
- Mortgage size.
- Where you are buying in the country.
- Mortgage product (5 year fixed rates and Specialist lenders can provide more).
- Whether you are willing to take out a current account with the bank.
- Bonus/Commission/Overtime. Its track record and payment frequency (i.e. monthly, quarterly or annual).
- Flight pay | Car allowance | Location allowance | Shift allowances.
- Second job.
- Maintenance / Child support.
- Share income | Trust funds | Income protection pay outs.
- Private pension | State pension | Widows pension | Military pension | Annuities.
- Stipend | Bursary | Mortgage subsidy.
- Universal Credit | Disabled Tax Credit | Carers Allowance | Pension Tax Credits | Attendance Allowance | Employment & Support Allowance | Working Tax Credits | Child Tax Credits |
- Child Benefit Income | Personal Independence Payment (DLA)
- Foster Care.
EXPENDITURE TO GET THE MAXIMUM MORTGAGE
- Food and drink.
- Pension contributions.
- Ground rent and service charges.
- Credit Cards | Overdraft | Mail Order & Store Cards.
- Unsecured Loans | HP Commitments | Secured Loans | Buy Now Pay Later.
- Council Tax | Utility bills
- Mobile phones | Landline | Internet | TV | Satellite TV.
- Childcare Vouchers.
- Student Loans.
- Season Ticket Loan.
- Maintenance / Child support.
- School fees, nursery and child minding.
- Help to Buy equity loan | Shared ownership rent.
- Regular travel costs.
- Buildings insurance | Contents insurance | Pet insurance | Life & Medical insurance.
So how does this work in practice? Well let’s bring it to life: John is a first time buyer looking to buy a house at £250,000 in the North East. He wants a mortgage over 25 years.
Example 1:
John is employed mechanic on £35,000 basic.
Maximum mortgage £180,000*.
Example 2:
He also has an annual bonus of £5,000 paid in each of the last two years.
Maximum mortgage £205,700*.
Example 3:
We now include his a car loan for £10,000 paying £350 a month.
Maximum mortgage £180,000*.
Example 4:
To boast things John wants to include his self-employed private work. His net profit is £10,000 this year and £7,500 the two years before.
Maximum mortgage £225,600*.
Example 5:
He decides to buy with his girlfriend. She is a home maker with two children from a previous relationship and a £5,000 store card.
Maximum mortgage £208,125*.
If you are looking to get the Maximum Mortgage why not get in touch so we can look at your options. We also have a host of Mortgage tools on this website including online Mortgage calculators which can help you research products.
Important notes
* All “maximum mortgages” are examples, the exact figures will be subject to your individual circumstances, credit score and full underwriting.
** House purchase assumes Buildings insurance £35 and Council tax of £175.
