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How much can you borrow?

How much you can borrow depends on how much you can afford. Lenders will check this but you can too.

Lenders should lend responsibly. This means that they should consider whether you can keep up the mortgage repayments now and throughout the term of the mortgage; for example after an initial discount period ends. They should base this on things like your income, expenditure and other circumstances.

Mortgage lenders have in the past offered to lend a sum based on a multiple of your salary (before tax).

Lenders may take into account:

  • If you have other money coming in, such as bonuses, overtime or commission. However, since it isn’t guaranteed income lenders may, for example, only take into account half of this money.
  • If you already have lots of expenses, such as other loan payments, they will offer you less.

Recently it has become more common for lenders to make an affordability assessment when calculating how much they are prepared to lend you. Each lender will have its own method, but generally they will all try to calculate your disposable income, taking account of:

  • your total income;
  • any credit commitment such as loans and credit cards; and
  • household bills and living expenses.

If you have received advice from a mortgage broker, the firm advising you must recommend a mortgage that you are able to afford. Whether you receive advice or not, the lender must still lend responsibly. However, it's always worth satisfying yourself that you can afford the monthly payments - use our Budget calculator

Keep borrowing comfortable

  • Work out your budget using our Budget calculator to see how much money you’ve got coming in and going out and how much money you’ve got to spare.
  • Then you can also use our Mortgage calculator to see how much you will have to pay back each month at different rates on the amount you want to borrow. You can also put in rate increases to see how much your monthly repayments would go up if, for example, your mortgage interest rate increased by 1%.
  • Don’t be tempted to lie on your application form, for example overstating your income or applying for a buy-to-let mortgage for your own home. You could end up with a loan you can’t afford and possibly lose your home. You’ll also be committing fraud and could get a criminal record. And if you have a complaint later, complaints and compensation schemes will take your lie into consideration when deciding the outcome of your case. If you’ve been urged to lie on your application by a mortgage broker, or anyone involved in your application, you should report this to us, to the mortgage lender or to the police – see Contact us.

Top tips

  1. Work out your budget first.
  2. Be clear about the whole cost of the mortgage – including fees.
  3. Don't be tempted to lie on your application form to get a bigger loan – it's fraud.