The amount you are able to borrow through a mortgage could vary by as much as lb22,500 depending on the lender are applying to, according to Which? research.
When buying a property it's not only the deposit you have to consider; additionally you need to element in the size of mortgage you’ll be able to get.
While online mortgage calculators provides you with a tough concept of how much you may be in a position to borrow, exclusive Which? studies have discovered that the truth is this might vary hugely between various lenders.
Below, we let you know that mortgage lenders see how much to lend you and also then reveal those that offer the biggest – and smallest – mortgages.
How much are you able to borrow for a mortgage?
The amount you can borrow will be determined by what the lending company thinks you can afford to repay.
This will be based on your income and certain outgoings for example childcare, travel, and repayments on existing credit card debts along with other loans.
Lenders will work an 'affordability assessment' in addition to checking your credit report to select the total amount they’re willing to lend you.
As a general rule, lenders will help you to borrow a maximum of four-and-a-half times your annual income (or the combined annual incomes individuals and whoever you’re buying with), but this may differ depending on the provider as well as their lending criteria, and even the area you’re buying in.
This means it can be a bit of a stab in the dark when searching for a home loan deal and when you select the wrong provider your property dreams could be unnecessarily dashed.
Where are you able to get the biggest mortgage?
We asked independent large financial company Which? Mortgage Advisers to check on what 10 major lenders would offer to some buyer in the following scenario:
We found a huge difference in what lenders would offer – lb22,500 actually; a substantial sum when attempting to land the home of your dreams.
| The amount a single applicant could borrow | Loan-to-income multiple | |
| Barclays | lb150,000 | 5 |
| Lloyds Banking Group (Halifax, Scottish Widows, Lloyds Bank) | lb142,500 | 4.75 |
| HSBC | lb142,500 | 4.75 |
| Coventry Building Society | lb135,000 | 4.5 |
| TSB | lb135,000 | 4.5 |
| Nationwide | lb134,700 | 4.49 |
| Virgin Money | lb134,700 | 4.49 |
| Yorkshire Building Society | lb134,700 | 4.49 |
| Santander | lb133,500 | 4.45 |
| RBS | lb127,500 | 4.25 |
In the analysis, Barclays offered the largest mortgage at lb150,000 – 5 times our applicant's income.
In contrast, the Royal Bank of Scotland offered the tiniest loan of just lb127,500 – or 4.25 times the applicant's income.
How are you able to raise the amount you can borrow?
Lenders need to stick to strict affordability rules to ensure they lend responsibly and you find affordable to repay the loan both now and in future, when rates could rise.
However, if you’re can not make the figures add up there are some things that you can do to boost the amount you can borrow.
Shop around: you may use individual mortgage providers’ online calculators to obtain a feeling of how much you’re apt to be able to borrow based on your needs. This can give you a steer as to which of them will probably offer the most.
Reduce outgoings: lowering your outgoings might help improve your affordability and boost the amount you are able to borrow.
Pay down other debts: in some cases, paying down a number of your credit debt can increase your borrowing capacity. It's best to seek advice on this option before jumping in though.
Adjust the term: sometimes taking out a mortgage over a longer time will help you satisfy the affordability requirements on a deal and for that reason boost your borrowing limits. Extending the term from 25 to 30 years, for example, can lower repayments, to have the ability to ask for more.
Consider a professional mortgage: some lenders offer more to applicants with certain professions and in some cases, you may also have the ability to borrow more through special products such as guarantor mortgages.
Seek advice: a professional mortgage broker may have detailed knowledge of all the lenders on the market and will be in a position to suggest those likely to lend you more based on your needs. Some lenders, for example, may exclude costs for example student loan repayments from their affordability calculation, potentially opening the doors to a larger mortgage.
