{"id":5033,"date":"2022-06-03T16:26:07","date_gmt":"2022-06-03T15:26:07","guid":{"rendered":"https:\/\/octagoncapital.co.uk\/?p=5033"},"modified":"2022-06-01T16:35:20","modified_gmt":"2022-06-01T15:35:20","slug":"how-big-a-mortgage-can-i-get","status":"publish","type":"post","link":"https:\/\/octagoncapital.co.uk\/guides\/how-big-a-mortgage-can-i-get\/","title":{"rendered":"How Big a Mortgage Can I Get?"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The <a href=\"https:\/\/octagoncapital.co.uk\/guides\/how-much-mortgage-can-i-have\/\">size of the mortgage<\/a> that you will be able to afford will depend on different variables including income, monthly outgoings and the value of the property you want to purchase.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>What Is a Mortgage?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">A mortgage is a type of home loan and acts as an agreement between borrowers and lenders in which a property is used as a guarantee. Once the mortgage transaction is made, borrowers will receive money and agree to a repayment plan with interest paid back to the lender over a set time period.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-5096 \" src=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Mortgage-broker-making-agreement.png\" alt=\"Mortgage-broker-making-agreement\" width=\"803\" height=\"595\" srcset=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Mortgage-broker-making-agreement.png 800w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Mortgage-broker-making-agreement-300x222.png 300w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Mortgage-broker-making-agreement-768x569.png 768w\" sizes=\"(max-width: 803px) 100vw, 803px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>What Size Mortgage Could I Afford?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The <a href=\"https:\/\/octagoncapital.co.uk\/guides\/how-much-mortgage-can-i-afford\/\">size mortgage you can afford<\/a> will depend on your circumstances. Before taking out a mortgage, lenders will look at a borrower to see if they want to lend them the money. Through this process, they will take into account the following factors: <\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Income<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Monthly outgoing payments including any debts <\/span><\/li>\n<li><span style=\"font-weight: 400;\">The amount of savings available to put down as a deposit<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Experts suggest that a good rule of thumb is for your total mortgage not to exceed 28% of your pre-tax monthly income.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>How Do Mortgage Lenders Decide How Much You Can Borrow?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The amount of money that you can borrow will depend on your income (most likely your salary) as well as your monthly outgoings.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-5097 \" src=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Calculating-costs.jpg\" alt=\"Calculating-costs\" width=\"801\" height=\"534\" srcset=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Calculating-costs.jpg 800w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Calculating-costs-300x200.jpg 300w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/06\/Calculating-costs-768x512.jpg 768w\" sizes=\"(max-width: 801px) 100vw, 801px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Mortgage providers, including banks and building societies, will most likely determine the size of the mortgage based on the total annual income of the borrower or the joint annual income if there are multiple borrowers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The general rule of thumb is that the higher the annual income, the higher the amount that you can borrow although there is variation between lenders with some willing to offer up to as much as six times your salary.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>How Does Salary Influence the Size of Mortgage I Can Get?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The amount that salary influences mortgages will depend on the lender with many operating on the basis that a mortgage should be around four and a half times your annual income.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Arguably more important than salary is the debt-to-income ratio that an individual has; this is the amount of monthly debt they have relative to the amount of income they receive. If a borrower has more outgoings than incomings, it shows that a mortgage may not be affordable for them.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Along with income, a lot of lenders will require a borrower to show <a href=\"https:\/\/octagoncapital.co.uk\/guides\/do-you-need-a-full-time-job-to-get-a-mortgage\/\">proof of employment<\/a>, factoring in the amount that they earn as well as how long they have been in that position. For that reason, those who are self-employed, between jobs or who are not in full-time employment may find it more difficult to secure a mortgage.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>Will My Credit Score Impact How Big a Mortgage I Can Get?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Credit score is an important factor when trying to secure a mortgage; lenders will look at this in order to determine if the borrower is a good candidate for a loan. Credit scores are based on spending history including any borrowing behaviour and can see whether an individual makes repayments on time and their amount of debt. If an individual has a higher credit score, they will typically be a better candidate for a mortgage.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img decoding=\"async\" class=\"aligncenter wp-image-4965 \" src=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/03\/Does-Credit-Score-Affect-Mortgages.jpg\" alt=\"Does-Credit-Score-Affect-Mortgages\" width=\"804\" height=\"453\" srcset=\"https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/03\/Does-Credit-Score-Affect-Mortgages.jpg 800w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/03\/Does-Credit-Score-Affect-Mortgages-300x169.jpg 300w, https:\/\/octagoncapital.co.uk\/wp-content\/uploads\/2022\/03\/Does-Credit-Score-Affect-Mortgages-768x432.jpg 768w\" sizes=\"(max-width: 804px) 100vw, 804px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If you have a higher credit score, you may be more likely to be approved for a loan as it shows that you can reliably meet payments. This in turn may mean that you can qualify for better loan terms including better interest rates and fewer fees.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You could still secure a mortgage if you have no credit history or a poor credit score but it may be more difficult and also may be subject to less favourable rates.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><strong>How Does Deposit Affect Mortgage Affordability?<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">The standard deposit amount for a mortgage is 20% of the property\u2019s value with 80% funded by the lender, but this varies between lenders and different mortgage products. Normally, if a borrower can put down a bigger down payment, it could save them money in the long term. It is also less of a risk for the lender meaning that they may be able to offer better loan conditions such as lower interest rates and shorter repayment period.<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The size of the mortgage that you will be able to afford will depend on different variables including income, monthly [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":5095,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How Big a Mortgage Can I Get? | Octagon Capital<\/title>\n<meta name=\"description\" content=\"How big of a mortgage you can get will depend on various factors, including income, the value of the property and your monthly outgoings.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/octagoncapital.co.uk\/guides\/how-big-a-mortgage-can-i-get\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How Big a Mortgage Can I Get? 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