If you’ve got ambitions to purchase a property, whether as a home or a buy-to-let and you’ve estimated that your mortgage will be in the vicinity of 140k, then this guide is for you.
We’ll be listing the factors that could affect your eligibility as well as how much deposit you can expect to pay, so read on or if you’ve got a question that can’t wait, use our online chat.
Am I eligible for a 140k mortgage?
Trying to preempt if you’ll be eligible for a mortgage for £140,000 can be pretty time consuming, especially given that most lenders use different criteria to decide whether or not to approve you.
Finding the right mortgage is usually a lot quicker with the assistance of a mortgage broker because they’ll know where to look and which lenders have agreements with terms that are more suitable or affordable.
You can use a mortgage calculator for a guide on how much you can borrow but for an accurate reflection of whether you’d get approved for a mortgage worth £140,000, ask one of our brokers.
How does my affordability affect a mortgage for £140,000?
As with any mortgage application, your chosen lender will want to check that you can afford your repayments. A lender will want your mortgage to be affordable to ensure that you pay on time and in full, so, to mitigate the risk of loss to them, they’ll look at factors such as your income.
Depending on whether you’re employed or self employed, your lender will likely ask for evidence of your income in the form of:
Bank statements
Pay slips
Tax returns
When calculating your affordability for a 140k mortgage, lenders will also look at your outgoings and stress Test whether you could realistically afford a mortgage as well as any other expenses including:
Household bills
Any debts you have including credit cards or car finance payments
Other outgoings such as travel costs or childcare costs
Repairs and maintenance of the property
I’ve recently started a job, can I get a 140k mortgage?
While it’s true that some lenders can feel cautious about loaning to new starters or those in short-term contracts, there are other factors that some lenders will take into consideration.
If your earnings from the last three years have been steady and substantial enough to meet a lender’s criteria and you have proof of employment in the form of a contract, it may be possible to get approved.
What other factors will lenders consider for a 140k mortgage?
Most but not all, will also look at the below factors when making their decision:
Your age - older borrowers can be given shorter mortgage terms
The hours you work i.e. part time or full time
Your credit history
The amount of debt you have
The cost of your outgoings
The type of property you’re buying - some structures or building materials can be expensive to repair and maintain, so lenders will want to check you can afford them.
The good news is that even if you’ve been rejected for a £140,000 mortgage with one lender, it doesn’t necessarily mean that a different one will reject you too.
That’s because each lender has different criteria so while one specialises in mortgages for older people, another may specialise in first-time buyer mortgages.
Getting the right mortgage, with terms that work for you, is often dependent on your ability to compare hundreds of lenders, which as mentioned before, can take some time.
A mortgage broker can save you the hassle, as they use their access to the market and quickly compare the loans that you’re more likely to be eligible for.
How much do I need to earn for a £140,000 UK mortgage?
Most UK lenders use income multiples of 4.5 x an annual salary, though in some circumstances where the applicant is deemed to have good affordability, it might be possible to get a mortgage worth up to 5.5 x an annual salary.
Hypothetically, if your chosen lender used an income multiple of 4.5, to qualify for a £140,000 mortgage, you’d need a minimum income of £31,111.
Of course, you’ll also need to meet your chosen lender’s other criteria, so to truly know how much you can borrow, ask one of our brokers who can look at your situation as a whole.
Can I get a mortgage for £140k if I’m self employed?
It may be possible to get a mortgage as a self employed borrower, if you’re able to prove you have an income and potentially a future income, that is enough to cover your mortgage repayments and any other expenses you have.
Some lenders do view self employed borrowers as riskier applicants as the nature of their income can sometimes be less predictable than that of an employed worker.
That’s why sometimes, lenders can ask for evidence of upcoming contracts, as well as two or more years' certified accounts, SA302 forms or a tax year overview (from HMRC) for the past two or three years.
Of course, that isn’t always the case and there are specialist lenders who are more likely to approve loans for self employed mortgage customers.
How much deposit do I need to buy a £140,000 house?
In exceptional circumstances, lower deposits of 5 - 10% could be achievable, though currently, the majority of lenders are asking their borrowers to put down 15 - 20% of the properties market value.
The table below shows the relationship between deposit size and mortgage amount for a property with a market value of £140,000.
Property value | Deposit size as a percentage | Deposit size in GBP | Mortgage amount | LTV ratio |
£140,000 | 5% | £7,000 | £137,000 | 95% |
£140,000 | 10% | £14,000 | £126,000 | 90% |
£140,000 | 15% | £21,000 | £119,000 | 85% |
£140,000 | 20% | £28,000 | £112,000 | 80% |
£140,000 | 25% | £35,000 | £105,000 | 75% |
Can I get a BTL mortgage for £140,000?
BTL mortgages can be seen as higher risk loans because the repayments are often reliant on the borrower’s ability to find tenants and charge a profitable rental yield. Some lenders will also want to consider the viability of the investment when deciding whether or not they can approve your BTL mortgage for £140,000.
BTL mortgages can also have higher deposit requirements, with some lenders asking for 40% deposits. If you were to apply for a mortgage for £140,000, that could mean that you’ll need a £56,000 deposit.
Where can I find the best mortgage deal for a 140k mortgage?
If you’re wondering whether you could be eligible for a mortgage worth £140,000, it might be worth speaking to a mortgage broker who can check on your behalf before you apply. They can also advise you on the most financially viable routes, to help you save money wherever possible.
Call us or try our mortgage calculator to learn more about how much you could borrow.
