This guide explains how much you can borrow as a first-time buyer in the UK and what factors influence your mortgage amount. It helps you understand what lenders consider and how to optimise your finances to secure the mortgage you need.
Maximum Borrowing and Income Multiples
Lenders usually use income multiples to calculate how much you can borrow. Typical multiples range from 4.0x to 4.5x of your annual income. High earners, joint applicants, or applicants with strong financial profiles may access up to 5.0x or more.
For example:
- Single income of £30,000 per year
- 4.0x income = £120,000 mortgage
- 4.5x income = £135,000 mortgage
- Combined income of £60,000 per year
- 4.0x income = £240,000 mortgage
- 4.5x income = £270,000 mortgage
Factors Affecting How Much You Can Borrow
Income
Your total annual income including salary, bonuses, commission, and certain benefits.
Existing Debts
Loan and credit commitments reduce your borrowing potential.
Outgoings
Regular household bills, childcare, and other fixed costs are considered.
Credit Score
A good credit score increases the likelihood of a higher borrowing amount.
Deposit Size
A larger deposit reduces the loan-to-value ratio, giving access to higher borrowing and lower rates.
Interest Rate Stress Tests
Lenders ensure you can afford repayments if interest rates increase.
Joint Applications
When applying with a partner, lenders combine incomes and assess both credit histories. One applicant’s debts can reduce the overall borrowing capacity.
Improving Borrowing Potential
- Reduce existing debts and credit card balances
- Increase your deposit
- Improve credit history by paying bills on time and registering on the electoral roll
- Increase your income through bonuses, overtime, or secondary sources
Practical Steps Before Applying
- Calculate your total household income
- List your regular outgoings and debts
- Check your credit score
- Decide on deposit size
- Use a mortgage affordability calculator to estimate potential borrowing
- Get a mortgage in principle before making offers
Tools to Estimate Borrowing
- Mortgage Affordability Calculator
- Deposit & Savings Planner
- Mortgage Repayment Calculator
Using these tools helps you understand your realistic borrowing potential before approaching lenders.
