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A household salary of £45,000 is above the UK national average, but what size mortgage will you qualify for earning this amount? Read on to find out.
What size mortgage can you afford with a £45k salary?
With an annual household salary of £45,000, most UK mortgage lenders would be willing to offer you a mortgage of up to £202,500. This is based on the standard affordability calculation that most providers currently use: 4.5 times the applicants’ income.
While this gives you a rough idea of your maximum borrowing, there are ways to secure a bigger mortgage. A smaller number of lenders use larger salary multiples to assess affordability, and may be willing to offer you a mortgage based on 5-6 times income.
If you were to successfully apply to one of these mortgage lenders, a £45,000 salary could mean you qualify for a mortgage of between £225,000 and £270,000.
Income multiples aren’t the only factor that determine your borrowing cap. Lenders also review outgoings, the strength of your application and more when running their checks.
Calculate your maximum borrowing
You can use our calculator below to get a rough idea of how much you can borrow with a £45k salary based on the most common income multiples lenders use.
This tool is set up to calculate this income amount by default but the figure can be changed manually if you wish to make some comparisons.
Now that you have run your calculations, you can either compare the latest mortgage rates for free or speak to one of our brokers for guidance - get started here.
Factors that determine your maximum borrowing
Your salary of £45,000 isn’t the only variable your mortgage lender will take on board when assessing your affordability. There are others that have a direct impact on your maximum borrowing, and others that can shape it indirectly, such as the quality for your application.
Here we will take a closer look at all of the factors that determine mortgage affordability.
Total declarable income
In addition to your £45,000 salary, you may have secondary, or supplemental sources, of income that can be declared for the affordability assessment, on top of your main wages.
Supplemental income sources that most lenders allow include:
-
Freelance work
-
Regular overtime
-
Rental income
Some lenders will only let you declare a capped percentage of the above, but others will accept 100% of them, which can significantly expand your maximum borrowing.
Outgoings
Fixed outgoings will be offset against your £45,000 salary and any additional income you have to determine the exact amount of earnings you can declare for your mortgage.
Not all outgoings will reduce the amount you can borrow, but some of the below might:
-
Council tax
-
Utility bills
-
Broadband
-
Loan or credit cards agreements
-
Car payments
Your profession
Some lenders reserve their highest income multiples (5.5-6 times income) for borrowers in specific prestigious professions where wages and progression prospects are favourable.
Professions that qualify for these income multiples include:
- Medicine
- Law
- Emergency services
- Military
- Civil service
- Surveyors
- Architects
- Other key workers
Deposit amount
Some lenders will only offer you a mortgage based on a higher income multiple than 4.5 times salary if you have a certain amount of deposit. Those with a loan-to-value (LTV) ratio of 60-80% (20-40%) deposit will have more options when it comes to borrowing extra.
Other factors
Having a strong mortgage application means access to more lenders and deals, including ones that allow you to potentially borrow up to 5-6 times income.
A strong application would be one where the following applies:
- The borrower has clean credit
- They will be under age 75 during the mortgage term
- The property they are buying is free of non-standard construction
- If the applicant is self-employed, they have at least two years’ accounts
If risk factors are present, the mortgage deals available might come with affordability capped at 4-4.5 times salary, but some lenders are more generous than others.
Example calculations
With outgoings and supplemental earnings factored in, the amount of income you can declare on your mortgage might be higher or lower than £45,000.
The table below shows example calculations for similar amounts in the same ballpark:
|
Income Amount |
4 Times Salary |
4.5 Times Salary |
5 Times Salary |
5.5 Times Salary |
6 Times Salary |
|
£42k |
£168,000 |
£189,000 |
£210,000 |
£231,000 |
£252,000 |
|
£43k |
£172,000 |
£193,500 |
£215,000 |
£236,500 |
£258,000 |
|
£44k |
£176,000 |
£198,000 |
£220,000 |
£242,000 |
£264,000 |
|
£45k |
£180,000 |
£202,500 |
£225,000 |
£247,500 |
£270,000 |
|
£46k |
£184,000 |
£207,000 |
£230,000 |
£253,000 |
£276,000 |
|
£47k |
£188,000 |
£211,500 |
£235,000 |
£258,500 |
£282,000 |
Calculations all done? Here are your options now...
How to get a £45k salary mortgage
Now that you’ve run your calculations, you can either compare the latest mortgage rates for free on Teito or speak to one of our expert brokers for advice about your next steps.
Here are just some of the reasons our customers choose us for their mortgage needs:
- You can access the latest mortgage rates in seconds
- Our brokers can access exclusive mortgage deals
- We are 5-star rated on leading review websites
- You can secure an agreement in principle in minutes
Ready to compare rates and deals and take advantage of a free, no-obligation chat with a whole-of-market mortgage broker? Get started here.
FAQs
Yes. Interest-only mortgages can have higher minimum income requirements than capital repayment, but the minimum you need to earn is usually around £25,000. Some lenders do have higher requirements, anywhere between £50,000 and £75,000, for this repayment type, but with an annual salary of £45,000, you are likely to have options available.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.