Getting a Mortgage of 4 to 4.5 Times Your Salary
Speak to an Expert Advisor
or
Why Choose Us
What Our Clients Say About Us
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
01.07.2024
Written by:
Alison Gibson
Ascot Mortgage Expert
Last Updated:
01.07.2024
Purchasing a home is a significant financial commitment, and understanding how much you can borrow is crucial. One common benchmark is obtaining a mortgage 4.5 times salary. This guide will explain everything you need to know about securing a 4.5 times salary mortgage in the UK.
What does it mean to get a mortgage 4 or 4.5 times your salary?
A mortgage of 4.5 times salary means that lenders are willing to loan you up to 4.5 times your annual income. For instance, if your yearly salary is £40,000, you might be eligible for a mortgage of up to £180,000. This multiple helps determine your borrowing power and affordability.
Mortgage multiples:
4.5 times salary mortgage: Up to 4.5 times your annual income.
4 times salary mortgage: Up to 4 times your annual income.
Lenders use these multiples to balance what they can offer you and what you can realistically afford to repay, considering your overall financial health.
How much can I borrow with a 4x, 4.5x, 5x salary mortgage?
The table below illustrates potential borrowing amounts:
Yearly Salary | 4 Times Salary | 4.5 Times Salary | 5 Times Salary |
£20,000 | £80,000 | £90,000 | £100,000 |
£30,000 | £120,000 | £135,000 | £150,000 |
£40,000 | £160,000 | £180,000 | £200,000 |
£50,000 | £200,000 | £225,000 | £250,000 |
£60,000 | £240,000 | £270,000 | £300,000 |
£70,000 | £280,000 | £315,000 | £350,000 |
£80,000 | £320,000 | £360,000 | £400,000 |
£90,000 | £360,000 | £405,000 | £450,000 |
£100,000 | £400,000 | £450,000 | £500,000 |
This table helps to understand the range of mortgage amounts you could potentially borrow based on your annual income and the income multiple applied by different lenders.
How much deposit do I need for a 4.5 times income mortgage?
The required deposit typically ranges from 5% to 20% of the property’s value.
Here’s a quick reference:
Property Value (£) | 5% Deposit (£) | 10% Deposit (£) | 20% Deposit (£) |
50,000 | 2,500 | 5,000 | 10,000 |
60,000 | 3,000 | 6,000 | 12,000 |
70,000 | 3,500 | 7,000 | 14,000 |
80,000 | 4,000 | 8,000 | 16,000 |
90,000 | 4,500 | 9,000 | 18,000 |
100,000 | 5,000 | 10,000 | 20,000 |
A higher deposit may increase your chances of securing a mortgage 4.5 times salary UK and potentially reduce the interest rates you’ll be offered.
Mortgage Affordability Calculator
Use our Mortgage Affordability Calculator to determine how much you can borrow.
Example:
- Annual Income: £50,000
- Monthly Outgoings: £1,500
- Possible Mortgage: £225,000 (using a 4.5 times salary multiple)
Mortgage Affordability Calculator
Use this calculator to determine how much you could potentially borrow for a mortgage, based on the typical salary multiples used by most UK lenders.
Is a mortgage always based on this multiple?
While the mortgage 4 times salary and 4.5 times salary mortgage are common, not all mortgages are based on these exact multiples. Lenders may adjust the multiple based on several factors:
- Credit score: A higher credit score can lead to a higher multiple.
- Income stability: Stable and consistent income increases lender confidence.
- Existing debts: Lower debts can enhance borrowing limits.
Speak to an expert about mortgage affordability
Navigating the mortgage landscape can be complex. Speaking to a mortgage broker can help you understand:
- Personal affordability: Tailored advice based on your financial situation.
- Best rates: Access to competitive interest rates.
- Loan options: Various mortgage products available.
Can I get a 4.5x salary mortgage with bad credit?
Obtaining a 4.5 times salary mortgage with bad credit can be challenging but not impossible. Here are some strategies:
- Improve your credit score: Address issues on your credit report.
- Higher deposit: A larger deposit can mitigate lender risk.
- Specialist lenders: Some lenders specialise in bad credit mortgages.
Can self-employed borrowers use a 4.5x income multiple?
Yes, self-employed individuals can qualify for a 4.5 times income mortgage. However, they often face stricter criteria, such as:
- Income proof: Usually required to provide 2-3 years of accounts.
- Income consistency: Demonstrating stable or increasing income over the years.
Other factors affecting borrowing limits
Several factors can influence your borrowing limits beyond your salary:
- Debt-to-income ratio: Lower existing debts improve borrowing power.
- Loan term: Longer terms can reduce monthly repayments, influencing affordability.
- Interest rates: Lower rates can increase how much you can borrow.
Which lenders offer 4-4.5 salary multiples
Many UK lenders offer 4-4.5 times salary mortgages. Some prominent ones include:
- HSBC
- Barclays
- NatWest
- Santander
Each lender has specific criteria and may offer different terms based on your financial profile.
Can you borrow more than 4.5 x salary?
In some cases, borrowing more than 4.5 times your salary is possible, particularly for high-income earners or those with exceptional financial profiles. However, it often involves:
- Stricter lending criteria: Tighter scrutiny on financial stability.
- Higher interest rates: Increased borrowing risk for lenders.
Get matched with a broker experienced in higher multiple mortgages
Finding the right mortgage broker can make a significant difference. A broker experienced in higher multiple mortgages can:
- Identify suitable lenders: Match you with lenders offering high multiples.
- Negotiate terms: Help secure favourable loan terms.
- Provide tailored advice: Offer guidance based on your unique situation.
Conclusion
Securing a mortgage 4.5 times salary UK is a viable option for many homebuyers. By understanding the criteria, speaking to experts, and exploring various lenders, you can find the best mortgage to suit your needs. Start by calculating your affordability and consult a broker to navigate the process smoothly.
Apply for a Mortgage
Get things moving, apply for a remortgage.
Free unbiased mortgage advice is just a phone call away.
FAQ
01/ What does a mortgage of 4 or 4.5 times my salary mean?
A mortgage 4.5 times salary means that lenders are willing to loan you up to 4.5 times your annual income. For example, if your annual salary is £40,000, you may be eligible for a mortgage of up to £180,000. This multiple helps determine your borrowing power based on your income.
02/ How much deposit do I need for a 4.5 times income mortgage?
The deposit required usually ranges from 5% to 20% of the property’s value. For a property valued at £100,000, this would mean a deposit of between £5,000 (5%) and £20,000 (20%).
03/ Is a mortgage always based on this multiple?
No, not all mortgages are based on the 4 or 4.5 times salary multiple. Lenders may adjust the multiple based on factors such as your credit score, income stability, and existing debts.
04/ Can I get a 4.5x salary mortgage with bad credit?
Obtaining a 4.5 times salary mortgage with bad credit is more challenging, but possible. Strategies include improving your credit score, providing a higher deposit, and seeking specialist lenders who cater to bad credit borrowers.
05/ Can self-employed borrowers use a 4.5x income multiple?
Yes, self-employed individuals can qualify for a 4.5 times income mortgage, although they might face stricter criteria such as providing 2-3 years of accounts and demonstrating consistent or increasing income.
06/ What factors affect borrowing limits?
Several factors influence borrowing limits, including your debt-to-income ratio, loan term, interest rates, and overall financial health.
07/ Which lenders offer 4-4.5 salary multiples?
Many UK lenders offer 4-4.5 times salary mortgages, including HSBC, Barclays, NatWest, and Santander. Each lender has specific criteria and terms based on your financial profile.
08/ Can I borrow more than 4.5 times my salary?
In some cases, borrowing more than 4.5 times your salary is possible, particularly for high-income earners or those with exceptional financial profiles. However, this often involves stricter lending criteria and potentially higher interest rates.
Meet Our Team
A simples guide to mortgages
Contact Us
Legal
Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
©2024 AscotMortgages.co.uk – All Rights Reserved
