Mortgages - How much you can borrow?
an excellent deal when comes to Home Insurance
Mortgages
How much you can borrow?
How much a mortgage lender will let you have is variable, each firm uses a different model to calculate this but in essence they are all very similar - they are based on your ability to pay back the loan, hence they ask you details about your current expenditure etc, and then they work out the max loan they will make available to you by applying a multiplier to your salary. This means that for a single borrower most lenders will typically lend you around 3.5 times your basic salary, i.e. if you earn £25,000 you will be allowed to borrow £87,500. If you are applying for your mortgage with a partner the multiplier is slightly different, usually around 2.5 times your combined salaries, although some firms may allow you more. This means that if both applicants earn £25,000 p/a lenders would be looking at around £125,000 as a loan maximum. This does vary, so it's worth checking out a number of providers to see who can give you the best deal to match your circumstances.
Links to a number of mortgage firms are shown below…
Don't forget that however much you borrow the lender will expect to be paid whether you are able to pay or not – it makes sense to insure your mortgage payments, so that even if you cannot work through accident, sickness or unemployment your home is safe.
You can get a mortgage protection quote here.