| Typical income multiple | 4 to 4.5 times gross income |
|---|---|
| Enhanced multiples | Up to 5–5.5x for some higher earners |
| Regulatory LTI threshold | 4.5x; high-LTI loans are capped at 15% of the market's new lending |
| Stress test | Lenders must allow for likely rate rises over at least 5 years |
| Typical minimum deposit | 5–10% for a home; 25% for most buy-to-let |
How do lenders work out how much I can borrow?
Lenders use two tests together: an income multiple and a detailed affordability assessment. The multiple sets a ceiling. The affordability check then confirms you could still pay if rates rose and your spending stayed the same. You can borrow the lower of the two figures.
The affordability model looks at your net income, committed outgoings such as loans and car finance, and typical household spending. It also considers dependants, childcare and the mortgage term. Two people on the same salary can receive quite different maximum loans, because their outgoings differ.
What income multiple do UK lenders use?
Most lenders cap residential borrowing at 4 to 4.5 times gross annual income. Some offer 5 to 5.5 times for applicants with higher incomes, strong credit or professional qualifications, often with a lower loan-to-value.
These higher limits exist because of the Bank of England's loan-to-income (LTI) flow limit. Mortgages at 4.5 times income or more can make up no more than 15% of new residential lending across the market. Since July 2025 individual lenders have had more flexibility within that aggregate limit, and regulators consulted on further changes during 2026. In practice, high-LTI lending is still rationed, and criteria change often.
For joint applications, most lenders add incomes together and apply the multiple to the total.
What is the mortgage stress test?
The stress test checks whether you could still afford payments if interest rates went up. FCA rules require lenders to consider likely rate rises over at least the first five years of the mortgage.
The Bank of England withdrew its separate fixed stress test in 2022, so each lender now sets its own approach. Many test a variable or shorter-term loan at a rate above the product rate. Longer fixes of five years or more are often tested at, or close to, the actual rate. That is why a five-year fix can sometimes support a larger loan than a two-year deal.
Which types of income do lenders accept?
Basic salary is accepted in full by every lender. Other income is treated differently, and this is where lender choice matters most.
- Bonus and overtime: often 50–100% of a two-year average, depending on the lender.
- Self-employed income: usually based on one to three years' accounts or SA302s. See our self-employed income guide.
- Contractors: some lenders annualise a day rate.
- Rental, dividend and investment income: accepted by some lenders with evidence.
- Foreign currency income: often discounted to allow for exchange rate risk.
Complex or international income is common among our Mayfair clients. Specialist and private bank lenders may assess wealth and future earnings, not just today's payslip.
What reduces how much I can borrow?
Anything that increases your monthly commitments reduces your maximum loan. Credit card balances, personal loans, car finance, student loan repayments and childcare costs all count.
A shorter mortgage term also lowers the figure, because monthly payments are higher. Missed payments or defaults on your credit file may limit you to specialist lenders. Clearing small debts before applying, and checking your credit report for errors, can make a real difference.
Does my deposit affect how much I can borrow?
Your deposit does not usually change the income multiple, but it does change the loan-to-value (LTV). A lower LTV gives access to more lenders and often better rates. Some lenders reserve their highest multiples for borrowers with a 10% or larger deposit.
Your budget is your deposit plus the loan. Remember to keep money aside for stamp duty, legal fees and surveys.
Should I borrow the maximum a lender offers?
Not necessarily. A lender's maximum shows what you could borrow, not what feels comfortable. Think about future rate changes, career breaks, children and other plans. Your home may be repossessed if you do not keep up repayments on your mortgage.
A sensible next step is a mortgage in principle, which shows sellers and agents you are ready to proceed. Our borrowing calculator gives a quick estimate before you speak to an adviser.
Sources
- MoneyHelper: What mortgage can I afford?
- FCA: Interest rate stress test rule
- FCA: The FPC's mortgage market recommendations
- FCA CP26/12: Loan to income flow limit consultation
Frequently asked questions
How much can I borrow on a £50,000 salary?
At typical multiples of 4 to 4.5 times income, a £50,000 salary could support roughly £200,000 to £225,000. A few lenders may go higher if your outgoings are low and your credit is strong. Debts, dependants and childcare costs can reduce the figure. Your deposit is added on top to give your total budget.
Can I borrow 5 or 6 times my salary?
Some lenders offer 5 to 5.5 times income, usually for higher earners, certain professionals or borrowers with larger deposits. Six times income is rare and generally limited to specific schemes or private banks assessing wider wealth. Because high loan-to-income lending is capped across the market, availability changes often.
Do lenders use gross or net income?
Income multiples are applied to gross annual income. The affordability assessment, however, works from net monthly income after tax, national insurance, pension contributions and student loan repayments. Both tests must be passed, so your take-home pay and committed outgoings matter as much as your headline salary.
Does a joint mortgage mean we can borrow more?
Usually yes. Most lenders combine both incomes and apply their multiple to the total. Both applicants' credit files and outgoings are also assessed. If one person has significant debts or adverse credit, it can reduce the joint figure or limit the choice of lenders.
Does a longer mortgage term increase how much I can borrow?
It can. A longer term lowers monthly payments, which helps the affordability calculation. Many lenders offer terms of up to 35 or 40 years, subject to your age at the end of the term. The trade-off is that you pay more interest overall.
Will checking how much I can borrow affect my credit score?
A broker's initial conversation and most calculators do not touch your credit file. Many lenders use a soft search for a mortgage in principle, which other lenders cannot see. A full application uses a hard search. Ask before any check so you know which type is being used.
Is bonus income counted for a mortgage?
Often, but not always in full. Lenders typically average bonus or overtime over one or two years and may count 50% to 100% of it. Guaranteed or contractual bonuses are treated more generously than discretionary ones. A broker can match you with lenders that suit your pay structure.
Can I borrow more if I am self-employed?
Self-employed borrowers use the same income multiples, but lenders assess income differently. Most use your latest one to three years of accounts or tax calculations, either the latest year or an average. Company directors may be assessed on salary plus dividends, or on their share of company profit, depending on the lender.
Important: This guide is general information, not personal advice. Rules, rates and lender criteria change; speak to an adviser about your circumstances. Your home may be repossessed if you do not keep up repayments on your mortgage.