How much can I borrow for my mortgage if I earn £150,000 or £200,000?
The biggest banks and building societies typically lend between four times single or joint salaries and up to 5.5 times single or joint incomes. Some smaller or specialist lenders issue up to six times salary mortgages although they charge higher rates.
If you are a single applicant with a clear credit history earning at least £150,000, borrowing up to £825,000 may be possible. If you have a partner going onto the mortgage and they earn £75,000, this could increase to £1,237,500.
A single applicant with a £200,000 salary could borrow up to £1,100,000, and with a partner earning £50,000 added to the application, the loan could rise to £1,375,000.
Aaron Strutt, product director at Trinity Financial, says, "The lenders use affordability calculations to generate the maximum borrowing amount. Some providers are much more generous than others, especially if you do not have debts like credit cards, loans, or expensive cars on finance.
"Some use the Office for National Statistics to generate national averages to work out maximum loans, while others use their figures. Some ignore pension contributions and living expenses, while others will not reduce the loan by such a large amount if you have children or kids in private school."
How many lenders offer 5.5 salary mortgages to cater for higher earners?
Trinity Financial has access to various lenders offering 5.5-times-salary mortgages through leading banks like Barclays, Clydesdale Bank, Santander for Intermediaries, TSB for Intermediaries, and HSBC. To qualify, applicants often need to earn over £75,000 or £100,000 per annum. The trick is approaching the lender issuing the lowest rates, set up fees and offering a prompt and efficient service.
Smaller building societies offering higher income multiples for a mortgage
Some smaller building societies provide the most generous income multiples in the market, although they typically charge the highest rates. If you want the lowest rates, you must usually apply to the largest lenders.
Many building societies work on an actual affordability basis, so if the mortgage is taken on interest-only, the mortgage loan size increases. A few lenders, like the Teachers Building Society and Kensington for Intermediaries, provide up to six times the income for higher earners.
Other frequently asked mortgage questions
How much of a deposit will you need? If you are looking for a larger mortgage loan, you typically need a 10% deposit. The most competitively priced rates are available to borrowers with a 35% or 40% deposit, but rates are not much more if you have 25% to put towards a purchase.
Will you need a good credit score? A higher credit score can improve your chances of borrowing more, although some lenders use credit searches rather than credit scores. This means they can assess applicants with credit blips.
Do mortgage lenders have different acceptance policies? Mortgage lenders have different acceptance policies and lending rules, which means they assess people and their finances differently. For example, one lender may not be happy to offer you a mortgage, but a rival bank may be keen to lend.
Is it worth taking a private bank mortgage? If you have a particularly complex financial situation, it may make sense to approach a private bank for a mortgage, but generally speaking, mainstream banks can help most borrowers. Some private banks are good at issuing low-deposit larger mortgages or mortgages for international clients.
Are interest-only mortgages available? Trinity Financial has access to a wide range of banks and building societies offering interest-only mortgages to borrowers with differing financial situations.
Do lenders have minimum or maximum loan sizes? Many banks and building societies have minimum loan sizes of £50,000, but they will issue loans of £1 million or £2 million+. Private banks often have minimum loan sizes of £500,000 or £1 million+, although one private bank recently dropped its minimum loan size to £400,000.
Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change
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