An Income Multiplier is the number by which a mortgage lender will multiply your sole or joint incomes when calculating the maximum amount they are prepared to lend to you.
This multiplier will vary from lender to lender and the figure calculated is subject to adjustment for other factors including the makeup of your income (e.g. how much of your gross income before tax is made up from overtime or discretionary bonuses, etc).
For example, a mortgage lender might usually offer borrowers either 4 x the borrower’s primary salary or 3.5 x the borrower’s joint salaries (in the case of a joint application where both parties have income). These multipliers vary from lender to lender and depend upon personal circumstances.
In addition to the multiplier, other factors that lenders will set and which should be considered by borrowers when considering which lender is most likely to make the offer of a loan include; Type of work, whether full time or part time, other monthly expenses and disposable income, the interest rate and the deposit required.
One lender might be happy with a 5% cash deposit, others might require 30% deposit. In most cases, the larger the deposit the better the terms on offer from a lender.
However, more and more lenders are moving away from this way of calculating applicant’s maximum borrowing and applying a set of affordability rules. This involves taking into account other day to day expenditure and credit commitments. Two applicants on identical salaries can end up with very difference borrowing amounts!
For more details on how much you can expect to be able to borrow and what this will cost you every month contact our mortgage advisers on 01928 507477.
Download our Free First Time Buyers Guide
Recent posts
The Equity Release Council has revealed that three in five UK homeowners are interested in releasing money from their property later in life.
Prices for UK houses drop in July 2024
7 days ago
The average seller’s asking price dropped by 0.4% in July, a bigger drop than we have typically seen.
We explore the differences between Millennials and Gen Z and what both generations ideally want from a new home.
Overpaying mortgage vs money into savings
18 Jun 2024
Should you overpay your mortgage? If you can put extra cash away you need to seriously consider whether you should pay more off on your mortgage or put it into a savings account.
Buying a property, especially in the current climate, is a big decision for first time buyers. We have listed a few tips that can help you buy your first propertyy
Does the time of year make a difference in house purchases? The answer is, yes and no.
The popularity of buying a house can vary depending on various factors such as regional trends, how the economy looks, and of course personal circumstances.
6 Garden Tips to Add Value to Your Property
30 Apr 2024
If you are looking at putting your house on the market, you may want to consider giving your garden some TLC. Small changes can make your outside space a lot more attractive to potential buyers resulting in a faster sale.
Averages for a first time buyer in the UK
24 Apr 2024
Getting on the property ladder is a big milestone in life, and is not something to take lightly. There are several things to take into consideration such as saving up for a deposit, finding your dream home, and finding the best mortgage product to suit you. Here we look at UK first time buyer statistics.
More information
Trusted by
