The amount a lender will let you borrow comes down to two questions: how much do you earn, and what’s left each month once your commitments are paid. Lenders answer the first with an income multiple and the second with an affordability model. You’re offered the lower of the two.
Income multiples
Most UK lenders cap lending at 4 to 4.5 times your gross annual income, or joint income for a couple. Some offer 5 to 5.5 times to higher earners, certain professions or borrowers with large deposits. The Bank of England limits how much of each lender’s new lending can be at 4.5 times income or more, so higher multiples are rationed.
| Household income | 4× | 4.5× | 5.5× |
|---|---|---|---|
| £30,000 | £120,000 | £135,000 | £165,000 |
| £40,000 | £160,000 | £180,000 | £220,000 |
| £50,000 | £200,000 | £225,000 | £275,000 |
| £60,000 | £240,000 | £270,000 | £330,000 |
| £80,000 | £320,000 | £360,000 | £440,000 |
Affordability and stress testing
Lenders must check that you can afford the mortgage now and if rates rise. They look at:
- your net income (take-home pay)
- committed spending: loans, car finance, credit cards, student loans, childcare, maintenance
- basic living costs, often estimated from statistics on households like yours
- a stress rate, typically the deal rate plus 1–3 percentage points, or the lender’s reversion rate
With today’s average 2-year fixed rate of about 5.13%, a £200,000 mortgage over 30 years costs £1,090 a month. At a stress rate of 8.13% it would be £1,486. The lender wants to see you could manage that.
What reduces how much you can borrow
- Monthly debt payments. A £250 car payment can reduce borrowing by £40,000 or more.
- Credit card balances. Lenders often count 3–5% of the balance as a monthly commitment.
- Childcare costs and dependants.
- Variable income. Lenders may only count part of bonuses, overtime or commission, and want two years’ accounts if you’re self-employed.
- Credit history. Missed payments, defaults or CCJs reduce choice and raise rates.
- A short term. Higher monthly payments mean lower affordability.
What increases it
- Clearing debts before you apply
- A longer term (up to 35 or 40 years with some lenders). It’s affordable now, but costs more interest overall.
- A bigger deposit. It doesn’t change the loan size, but lowers LTV and the rate.
- Joint applications, with a partner or family member (joint borrower sole proprietor)
- Professional mortgages for doctors, lawyers and accountants, at higher multiples
Loan-to-value bands
Your loan-to-value (LTV) is the mortgage as a percentage of the property’s value. Rates fall at each band: 95%, 90%, 85%, 80%, 75%, 60%. Moving from 91% to 89% LTV can cut your rate noticeably, so it’s often worth saving a little more.
Steps before you apply
- Check your credit report with all three agencies.
- Work out your take-home pay accurately with the take-home pay calculator.
- Estimate borrowing with the mortgage affordability calculator.
- Budget for stamp duty and fees with the stamp duty calculator.
- Get a mortgage in principle from a lender or broker. This is usually a soft credit search.
A word of caution
Just because a lender will lend an amount doesn’t mean you should borrow it all. Leave room in your budget for rate rises when your fix ends, maintenance, and life changes. Our mortgage calculator shows what happens to your payment if you move onto a higher rate later.
Common questions
Can I borrow 5 times my salary?
Some lenders offer 5–5.5× income to higher earners or professionals, but most cap at 4–4.5×, and stress tests can lower it further.
Do lenders count bonus and overtime?
Often only partly, for example 50% of a regular bonus averaged over two years. Guaranteed overtime may count in full.
How much deposit do I need?
At least 5% for most lenders, but 10–15% unlocks noticeably better rates. Budget for stamp duty and fees on top.
Does a student loan reduce how much I can borrow?
Yes. Lenders treat the monthly deduction as a commitment. See student loan plans.
This guide is general information, not financial or tax advice.