How to get a bigger mortgage

How big of a mortgage can I get?

As a general rule, most lenders will multiply your income by 4 to 4.5 to work out how much you can afford to borrow for a mortgage. If you’re buying a home with your partner, family member or a friend, the lender will assess your affordability based on your combined income, meaning you’ll be able to borrow more than if you were to apply alone. But there are also other ways to increase what you can borrow, from family-supported options to innovative buying schemes.

For example, if you earn £30,000 a year, this means you’re probably looking at a standard mortgage of between £120,000 and £150,000. This, plus any money you’ve put aside for a house deposit, is the total property price you can afford to buy. If you buy with your partner, and have a combined income of £55,000, then you're likely to get a mortgage between £220,000 - £247,000.

When you apply for a mortgage, the mortgage lender will carry out a number of affordability checks before giving you a loan. They’ll look at your income, house deposit, credit rating, any existing debts, and other financial responsibilities to work out how risky you are as a borrower, and how much you can afford to borrow.

What is considered a big mortgage?

In general, you could borrow between 4-4.5x your household income for a mortgage, so anything over this amount could be considered a big mortgage. While it is possible for some borrowers to increase their borrowing to 5-6x their income, this isn't always advisable - the bigger the mortgage you take on, the more expensive your monthly costs will be.

How to get a bigger mortgage

There are a few ways you can get a bigger mortgage, even on a low income. As well as ensuring your credit score is immaculate and you’ve paid off any debts, the most common way to get a bigger mortgage is to increase the total income which your mortgage affordability is based on. You can do this by yourself, or through family support. There are also other schemes which reduce what you need to afford in the first place, such as shared ownership. 

If you need to increase what you can borrow for a mortgage, one option is to consider an Income Boost (a.k.a Joint Borrower Sole Proprietor mortgage). This is a type of guarantor mortgage, where you'll add a loved one's income to yours to boost what you can borrow. They won't be considered an owner, instead they'll be agreeing to be a guarantor - so if you miss any mortgage payments, they'll be required to step in.

There are also higher lending schemes that allow you to increase what you can borrow for a mortgage beyond the typical 4-4.5x multiple without family help. These schemes are usually reserved for high earners, or those in particular professions, like doctors, nurses, teachers, solicitors etc.

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Shared ownership is also another option. These part buy part rent schemes allow you to purchase a share of a property, and then pay rent on the rest. Because you're purchasing a share of a property, you'll only need a deposit and mortgage big enough to cover your share, instead of the whole property value. Over time, you can staircase up to full ownership by increasing your equity stake in the property.

Read more about shared ownership here

How to reduce the mortgage size you need

The other way to get on the ladder sooner is to reduce the size of mortgage you need. You can increase the size of your deposit yourself by saving more, thereby reducing what you need to borrow from a lender. But this can take a number of years. In fact, on average it takes someone almost 10 years to save up for a house deposit. It’s not surprising that over half of first-time buyers rely on family support to speed up getting their first home.

However, for a lot of families it’s simply impossible to give large lumps of cash to their children to help them get on the ladder. This is where Deposit Boost comes in. Deposit Boost involves unlocking equity from a friend or family member’s home and putting it towards your deposit.

This gifted deposit can be used to top up what you already have, or it can make up your whole deposit. With a larger house deposit, not only will you be able to borrow more, but you can access better mortgage deals. In fact, our data shows that you could save on average £17,000 over 5 years by accessing lower interest rates.

If you and your friends or relatives want to buy a home as co-owners, another option is to buy together with a joint mortgage. This is called Dynamic Ownership, which allows you to get a mortgage with up to five others. Each owner will hold individual equity in the home, and your share is based on what you contribute to the property over the years. If your co-owner wants to sell up later down the road, they can cash out when it suits them.

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Read more: What are mortgage interest rates and what is a good interest rate?

If your family does have cash savings but is wary of giving them away, one solution could be a Family Springboard mortgage. This is a type of guarantor mortgage, where your loved one puts 10% of the property’s value as cash in a savings account, which is used as security by the lender. If you miss any mortgage repayments, these savings will be used to cover the cost. As long as you pay all of your monthly payments on time, your family member will get their savings back, plus interest, after a set term.

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How to get a higher mortgage amount

If your credit rating is good and you’re putting down a bigger house deposit, you may be able to get a mortgage loan of 5 times your salary. Or, if you earn over a certain amount or have a job in a professional role (think doctor or solicitor) or a ‘blue-light’ role (think paramedic or police officer), you may be able to qualify for a higher lending scheme, letting you borrow up to 5.5 times or even 6.5 times your income.

But these schemes tend to have stricter eligibility criteria, making them harder to qualify for. Working with a mortgage broker can help you see if you are eligible for any enhanced borrowing schemes, or ways you can boost what you can borrow.

If you are struggling to afford a property in your local area and are not eligible for the above schemes, consider an Income Boost. By adding a loved one to your application as a guarantor, part of or all of their income could be added to yours when assessing how much to lend to you as a mortgage.

As your guarantor, they would be liable for your mortgage payments if you were unable to pay then, so they need to be comfortable with this beforehand!

What do mortgage lenders take into account?

Mortgage lenders will also check that you can afford the loan alongside your other responsibilities. They’ll look at your bills, debt payments, and monthly expenditure. Their checks might also include:

• Council tax
• Utilities
• Phone contracts
• Student loan payments
• Transport costs
• Childcare
• School fees
• Car finance
• Credit card bills 

What types of income do lenders accept?

Having a reliable salary can be really helpful when applying for a mortgage, but lenders will consider other forms of income too. These are the most common types considered:

• Basic salary income
• Self-employed income
• Child benefits and working tax credit
• Pension income
• Rental income from a buy-to-let property

Do mortgage lenders take bonuses into account?

Some lenders will include commission, overtime or bonuses in their mortgage calculations. But since these types of income aren’t always guaranteed, and can fluctuate from one month to the next, most lenders won’t accept 100% of that commission. You’ll also need to evidence that it’s not a one-off, by showing that additional income coming in over a longer period of time.

Can mortgage brokers get you a bigger mortgage?

Mortgage brokers may be able to help you get a bigger mortgage, as they can search from a wide range of deals including higher lending schemes to find all the products which you are eligible for. If you meet the qualifying criteria for these schemes, then you could get a bigger mortgage, however the amount a lender will offer you is also impacted by other factors like your credit score and affordability.

By creating a free Tembo plan, our smart technology will generate a personalised recommendation of how you could boost your buying budget by looking at schemes from over 100 mortgage lenders. One of our expert mortgage advisors can then chat you through the options, and help you move through each stage of buying your first home with as little stress and fuss as possible. To get started, create a plan today.