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Welcome to our guide to £25,000 salary mortgages. Here you will learn how much you can borrow with this amount of annual income, what factors will affect your maximum borrowing, and how to get started with your mortgage application.
Can you get a mortgage with a salary of £25,000?
Yes. Although £25k per year is below the UK national average salary, most residential mortgage lenders don’t specify a minimum income amount as part of their eligibility criteria.
Some will expect you to have a minimum amount of personal earnings, but that will typically be between £10k and £25k, so with this amount of income, approval is possible.
The only circumstances where your affordability might be restricted are if you are applying for an interest-only mortgage, a non-residential mortgage, or if you are a contractor.
How much can you borrow with this amount of income?
You could typically borrow between £112,500 and £125,000 from a mortgage lender with an annual salary of £25,000. This is based between 4.5 and 5 times your annual earnings, the most common income multiples mortgage providers use to calculate maximum borrowing.
A small minority of mortgage providers might let you borrow up to £150,000, based on 6 times your income, but only if specific conditions are met. Income multiples this high are usually reserved for people in professions such as medicine or law.
Mortgages of over 6 times salary are usually only available to high net worth individuals.
Calculate your maximum borrowing
You can use our calculator below to work out how much you can borrow with this amount of income. Simply hit 'calculate' below and the tool will do the rest.
Now that you have a better idea of how much you can borrow, your next step should be to compare mortgage rates from across the market. You can do this for free on Teito and choose the mortgage you want in real time - get started here.
Example calculations
The exact amount you can borrow will vary from one lender to the next as some will use less common income multiples such as 4 times salary or 5.5 times salary to arrive at your maximum mortgage amount. Furthermore, you may have supplemental income to declare on top of your annual salary, in which case £25,000 is merely a ballpark figure.
The table below shows a range of potential borrowing amounts for different salaries within the £25,000 region based on different income multiples that lenders may use.
|
Salary Amount |
4 Times Salary |
4.5 Times Salary |
5 Times Salary |
5.5 Times Salary |
6 Times Salary |
|
£25k |
£100,000 |
£112,500 |
£125,000 |
£137,500 |
£150,000 |
|
£26k |
£104,000 |
£117,000 |
£130,000 |
£143,000 |
£156,000 |
|
£27k |
£108,000 |
£121,500 |
£135,000 |
£148,500 |
£162,000 |
|
£28k |
£112,000 |
£126,000 |
£140,000 |
£154,000 |
£168,000 |
|
£29k |
£116,000 |
£130,500 |
£145,000 |
£159,500 |
£174,000 |
Factors that will determine your maximum borrowing
Your maximum mortgage borrowing is not just determined by the amount of income you have, in this case £25k. Other factors will play a part directly and indirectly, and they include:
- Outgoings: Your fixed outgoings will have a direct impact on the amount you can borrow as lenders will deduct them from your salary before applying their income multiple. Outgoings they will factor in include council tax, utility bills, broadband, loan or credit cards agreements, car payments and childcare costs.
- Supplemental income: Some lenders will allow you to declare other sources of income you might have, such as bonuses, overtime, benefits and investments.
- Credit history: Having bad credit won’t directly affect the amount you can borrow but may have an indirect impact since some mortgage deals with higher income multiples are not available to borrowers with certain types of adverse.
- Deposit amount: Can have an indirect effect as some mortgage deals with higher income multiples are reserved for borrowers with higher deposit amounts.
- Employment: Those who are self-employed with less than two years’ accounts or complex income may be limited to lower income multiples, while those in high paying professions such as medicine and law, might be able to access 6 times salary deals.
The better the overall strength of your application, the more likely you are to be able to access mortgages with higher income multiples, such as 5-6 times salary.
Why choose Teito for your mortgage needs?
Now that you have a better ideal of how much you can borrow with a salary of £25,000, you can start comparing mortgage rates and deals for free on Teito.
When you source a mortgage through us, you will also be offered a no-obligation chat with one of our whole-of-market mortgage brokers, who can provide you with advice, bespoke calculations and help you secure the best deal for your needs and circumstances.
Here are just some of the reasons our customers choose us:
- You can access mortgage rates for FREE 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 one of our whole-of-market mortgage brokers? Get started here.
FAQs
Yes. Most buy-to-let mortgage lenders will base their affordability assessment on the property’s forecast rental income, but some will expect you to have personal income to fall back on, especially if you are a first-time landlord or risk factors are present.
The lenders who prefer landlords to have personal income will usually be happy with £25k per year - only a handful will insist on your salary being £30-40k.
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.
