How Much Can I Borrow?

The Basics

There are two main factors that influence the amount you are able to borrow. The first of these relates to the current market value of the property to which the mortgage relates. Each lender will have a maximum percentage of the value that they will be willing to lend in each individual circumstances, this is more commonly known as the maximum loan to value (LTV). Lenders have an array of different criterion on which they will base the maximum LTV and at Best Choice UK we will be able to provide you with advice regarding different lenders attitudes in this area.

The second influence on the amount you can borrow is your current level of income. All lenders will have a set formula that they use to calculate the amount they will be willing to lend which is usually expressed as a multiple of your income. Commonly these will be between 3 and 3.5 times a single salary and 2.5 to 3 times joint income. However it is not necessarily the case that two lending institutions that have the same multiples available will lend the same amount of money to the same person. The definition of income may also change from one mortgage provider to the next. Some will allow for bonuses and some will only allow 50% of bonus. Overtime and commission may be treated similarly. Unless these payments are guaranteed then as a rule of thumb expect that 50% will be taken into account.

One other factor on which there is a debate as to how it will be treated is the aspect of adverse credit details. See FAQs for more details.

In summary you will find numerous different methods of calculating the maximum LTV but the figure once stated is usually non-negotiable.

Our Mortgage Calculator will allow you to see how much you can borrow and the cost of your monthly repayments.