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How much can I borrow for a mortgage?

The amount you can borrow depends on how much deposit you have, your credit history and your finances. Use our mortgage calculator to estimate how much you could borrow.

Amy Smith
Amy Smith
Updated 23 September 2021  | 2 min read

How much can I borrow?

What factors impact the amount you can borrow?

  1. Your income

    To give you an affordable mortgage, lenders need to know how much you earn from your job and other means, like bonuses or tax credits.

  2. Your outgoings

    Lenders also need to know how much of your income you spend, so they can work out how much you could put towards mortgage repayments.

  3. Your deposit

    The more deposit you contribute, the wider the choice of mortgages you’ll have.

  4. Your credit history

    Your credit score gives lenders an indication of how you manage your finances and pay bills. A good score shows you’re reliable, meaning you might be able to borrow more money.

  5. Potential future changes

    For example, if something happened to your income, lenders want to know how you’ll continue paying the mortgage. Or if interest rates went up, could you still afford to make the repayments?

How much can I borrow based on my income? 

Your lender will need to know what your income is Ultimately, it wants you to be able to repay your mortgage in full, plus interest – so if you’ve got a lower income, you might not be able to get the mortgage you want. 

This might sound like you’re excluded from having a mortgage if you’ve got a low income and/or can’t get a decent-sized deposit together - but this isn’t necessarily the case.

There are a number of lending schemes that might help you borrow what you need. 

A potential option is the government's help-to-buy scheme. It operates slightly differently in England, Wales, Scotland and Northern Ireland, but roughly, if you can get together 5% of the total value of the property you’re looking to buy, the government can lend you money towards a higher deposit.

Having a larger deposit makes it more likely that you’ll be accepted for a mortgage – so this could be quite a useful scheme to consider. 

There are downsides though. As it’s a loan and not a grant, it’ll have to be paid back, although not immediately. Be sure to research all the terms and conditions thoroughly, and weigh up all the pros and cons before committing. 

Alternatively, you may wish to consider a shared ownership scheme. This involves you buying a share of the property – normally between one and three quarters – and then renting the rest until you can afford to buy another share of the house. 

If you’re a housing association tenant, or you live in a council house, the Right to Buy scheme could help you buy your house for less than its market rate. 

Affordability scoring

Of course, it's not just your income that determines how much you can borrow. What you do with your income matters just as much. Your outgoings, your credit history, and whether you have any dependants or a partner will also have a bearing on your mortgage.

The duration of your mortgage will also have an impact on how much you can borrow. 

But why does that all matter? Well, it’s all to do with risk. Someone who consistently lives beyond their means is less likely to be approved for any kind of mortgage.

Conversely, someone with a good credit history who budgets effectively is more likely to be approved for a high-LTV mortgage over a longer term. Fiscal responsibility is very reassuring to the lender! 

There’s a lot to consider before diving into mortgage applications.  

How much you can afford to borrow depends on your deposit, your income, your credit history, and the value of the property itself. If you’re concerned about any of these, talk to an independent mortgage adviser before getting stuck into the application process.  

Compare mortgages

It’s important to look at all your options to find the right mortgage for your circumstances.

When you apply for a full mortgage, it can affect your credit rating and leave a mark on your credit history that other lenders can see.

But you can use a search (like ours) that lets you compare a range of mortgages that you’re likely to be accepted for before you apply.

By Amy Smith

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

PLEASE NOTE: THE FCA DOES NOT REGULATE MOST BUY TO LET MORTGAGES

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