How much can I borrow?
One of the first question clients ask is: ‘How much can I borrow?’ You can use our mortgage calculator to work out how much you can borrow and at what rate. This will help you establish what your price range is before you start looking for property and the deposit you need.
With a residential property, lenders decide how much you can borrow according to how much you earn. Some lenders use a standard income multiple: the number of times your income they will let you borrow. Lenders have different income multiples but generally speaking, will let you borrow four times your income or 3.25 times if you are buying with a partner, sibling or friend.
A number of lenders have moved away from using strict income multiples to affordability criteria. This gives them the bigger picture as affordability criteria takes into account your outgoings and debts as well as your income when working out how much you can borrow. If two people have identical income but one has huge credit card debts, the borrower who is debt-free will be able to get a bigger mortgage because they are in a better position to repay it.
Result: As a guide