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How much can you borrow on a mortgage?
There’s no straightforward answer, as it depends on a few things.
- Income – this is your salary and any other income you get from pensions or child maintenance support.
- Outgoings – any expenses you have, like credit cards, insurance, bills or loan payments.
- Living situation – if you’re self-employed, on maternity leave or don’t earn a regular income.
- Mortgage term – how long you want to pay off your mortgage.
- Property value – what the property is worth.
- Deposit size – the amount you’ve saved up.
1. Save a deposit
You’ll need a deposit to put down alongside your mortgage. A large part of the mortgage application is your loan to value ratio (LTV). This is the amount of money you are borrowing compared to the value of the property. The bigger the deposit, the less you’ll need to borrow and the better chance you’ll have of getting a lower interest rate.
Work out what you can afford to save each month and whether the money you have now is enough.
2. Work out your monthly commitments
Working out a budget will help you see how much you can afford to pay each month. Which in turn means you can work out how much you need to borrow, and which home you can afford.
Make sure you include:
- living expenses like food,
- childcare,
- money you spend on transport,
- utility bills and insurances,
- credit card bills,
- loans including student loan repayments.
You might also want to factor in a bit spare for social occasions or savings.
3. Work out what mortgage you could get
Our mortgage calculators can help you see how much you could borrow. It will tell you what your monthly mortgage repayments would be and if you could save by making overpayments.
4. Consider house buying costs
You’ll need to factor in other expenses when buying a house. Like conveyancing, stamp duty, estate agent and conveyancer fees.
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