Thinking about buying a house? One of the first questions you’ll hear from a lender is, "What’s your income?" It sounds simple, but the answer determines whether you can get a mortgage and how much you can borrow. In this guide we break down the numbers lenders look at, the common income thresholds, and what you can do if your earnings don’t meet the usual standards.
Most banks use two basic rules: the affordability test and the loan‑to‑income (LTI) ratio. The affordability test checks if your monthly outgoings, including the prospective mortgage payment, leave enough left over for living costs. The LTI ratio compares the size of the loan you want to the annual income you earn.
In practice, many lenders cap the LTI at around 4.5 to 5 times your gross yearly salary. That means if you earn £30,000 a year, you could be approved for a loan of roughly £135,000 to £150,000, depending on the lender’s policies and your other debts.
Here’s a quick look at how income lines up with common price bands in England:
These figures assume a 10% down payment and a standard mortgage rate. If you can put down a larger deposit, the required income drops because the loan amount shrinks.
Don’t panic if you’re a bit below the target. There are a few ways to improve your chances:
Self‑employed buyers face extra scrutiny because lenders need proof of stable earnings. Keeping tidy accounts, filing tax returns on time, and showing at least two years of consistent profit can make a big difference.
Before you apply, gather these documents:
Check your credit report for errors and fix any issues. Then, run a simple mortgage calculator online to see how different incomes affect the loan amount you can get.
Remember, the numbers are a guide, not a hard rule. Different lenders have slightly different policies, and a mortgage adviser can help you find the right fit. By understanding the basic income requirements and taking a few proactive steps, you’ll be in a stronger position to secure the home you want.
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