How Much Can I Borrow?

The first thing a mortgage provider will look at when calculating your mortgage is how much you earn. This sum is usually your gross basic salary before tax and deductions. Some lenders will take into consideration any regular overtime, commission and bonuses which are guaranteed to receive although they will need to see proof of this from your employer.

If you are single a provider will lend around three to three and a half times your income - as a rule of thumb. If you are submitting as a joint application then the rule of thumb is around three times the first income plus the second income, or two and a half times your joint income.

There are lenders that will lend more but this would be based on particular circumstances.

The loan to value (LTV) rate is the percentage of the value of the property a mortgage provider is prepared to lend you. Most providers will not lend above 95% of their valuation of the property. The amount left over is the amount that forms the deposit you put down. There are 100 and even 110% mortgages on the market but the interest is generally at a higher rate and you may need to take out a mortgage indemnity guarantee.

If you are self-employed your income is harder to prove, especially if you haven't been trading for at least three years. Generally, the income multiples are not as favourable as for those on PAYE. As a single applicant you will probably be restricted to three and a quarter times your combined income. Loan to value rates tend to be lower with most lenders only offering 75% but some do go as high as 85-90%.