How Much Can I Borrow for a Mortgage? A Complete Guide

The short answer

Most lenders will offer between 4 and 4.5 times your annual income. So if you earn £40,000, you could typically borrow between £160,000 and £180,000. But that's just the starting point — the actual figure depends on far more than your salary.

How lenders actually assess affordability

Modern mortgage affordability assessments are much more detailed than a simple income multiple. Lenders look at:

Your income — including salary, bonuses, commission, overtime, self-employment profits, rental income, and other regular income sources. Different lenders treat these differently, which is why the same person can get very different offers from different lenders.

Your outgoings — regular financial commitments including credit cards, loans, car finance, childcare costs, and other regular bills. Lenders will stress-test your ability to afford the mortgage if interest rates rise.

Your credit history — a strong credit history gives lenders confidence. A less-than-perfect history doesn't necessarily prevent you from borrowing, but it may affect the amount and the rate.

Your deposit — the larger your deposit, the lower your loan-to-value (LTV) ratio, and the better the rates available to you.

What counts as income?

This is where many people are surprised. Beyond your basic salary, lenders may consider:

• ●Regular bonuses and commission (typically 50–100% of the average over 2 years)
• ●Overtime (if consistent and evidenced)
• ●Self-employment profits or dividends
• ●Rental income from investment properties
• ●Child benefit and tax credits (some lenders)
• ●Pension income

The key word is may — different lenders have different policies. This is one of the most important reasons to use a whole-of-market broker rather than going directly to one lender.

How to improve your borrowing power

If you're not borrowing as much as you'd like, there are several steps you can take:

• 1.Reduce your outgoings — paying off credit cards and loans before applying can significantly increase what lenders will offer
• 2.Improve your credit score — register on the electoral roll, check for errors on your credit file, and avoid new credit applications in the months before applying
• 3.Save a larger deposit — moving from a 5% to a 10% deposit opens up significantly better rates and higher income multiples with some lenders
• 4.Consider a longer term — extending from 25 to 30 or 35 years reduces monthly payments and can increase what you can borrow
• 5.Apply jointly — adding a second income to the application can significantly increase your borrowing capacity

Use the calculator — but speak to a broker

Our borrowing estimate calculator gives you a useful starting point. But the most accurate picture comes from a broker who can assess your full situation and identify the lenders most likely to offer you the best deal.

var(--inspire-text)]">Ready to find out exactly what you can borrow? [Check your eligibility here — it takes under 2 minutes and won't affect your credit score.