Most mortgage lenders cap lending to 4.5x a person’s income but there are lenders in the UK that will approve mortgages for more. Professionals, those with impeccable credit or high income, may be eligible to apply.
This guide explains what a 5x salary mortgage is, where you can find the lenders that offer them and how you can apply.
An income multiple is a figure based on a multiple of your annual salary, so if your annual gross salary was £30,000 and your lender used an income multiple of 5, you could potentially borrow £150,000.
However, lots of lenders will be wary about lending so much money in comparison to an income so don’t be surprised at the tighter lending criteria that comes with mortgage agreements with high-income multiples.
There are lenders out there that provide them and this could allow you to buy a bigger and more expensive property but like any mortgage product, there are some considerations for you to ponder, the most important being whether you can afford to borrow that much.
Always check if you’re eligible with a mortgage broker ahead of applying for a 5x salary home loan.
The following table illustrates how the loan size will vary based on income, and the difference between income multiples of 4.5 and 5 as examples:
Speak to a broker who can highlight the lenders in the UK that provide larger loans based on income.
While comparison sites provide an overview of options, those options won’t necessarily be open to you as it’s your circumstances as a whole including the stability of your income and the type of property you’re buying that can affect your ability to meet the criteria for a specific product.
UK banks and lenders will look at numerous factors that affect your ability to repay your loan on time and in full including your:
The good news is that despite the added risk that some circumstances bring, there may still be a lender happy to approve a loan based on 5x your salary. It’s all about finding a lender with criteria that is open to your situation and applying for a loan that is affordable for you.
Every lender works to different eligibility criteria and perceives risk differently which can make the search feel frustrating, especially if you’re in a hurry and unsure where to even begin. That’s why the assistance of a broker can be invaluable.
Imagine person 1 earns £30,000 a year and person 2 takes home £20,000. As a single applicant, the maximum amount person 1 could borrow for a 5x salary mortgage is £150,000. With the addition of applicant 2, the combined mortgage size increases to £250,000.
Two incomes can provide more security too and this can work in your favour with some lenders who may perceive the level of risk you pose as lower. After all, if one joint borrower were to lose their job, the income of the other borrower could help to support the finances of the household and potentially cover the mortgage.
Residential mortgage repayments are reliant on the income of the borrower whereas buy-to-let mortgage repayments are reliant on the borrower’s ability to find tenants to pay rent.
If you’re a residential buyer, you may be able to get a mortgage with just a 5% deposit, though some lenders will ask for 10%, meaning your loan-to-value rate would be 90%.
Having a higher deposit can help you to access better interest rates, so in some circumstances, it may be worth saving a little longer in order to pay less for your mortgage overall.
However, if you’re keen to get a 5 x salary mortgage with a 5% deposit, perhaps because you’ve seen a property you want to quickly snap up or you’re just eager to move, it may be possible.
For mortgages with larger LTVs, you typically need a clean credit record and good affordability for the size of the loan you are applying for.
This type of mortgage could allow you to buy a property with a zero cash deposit too. Instead, to provide security for the loan, you’ll need a guarantor with either savings or residential property.
Loans at higher income multiples are riskier and risk is something that lenders try to avoid so your guarantor may need to deposit between 5-20% of your property’s value in a special savings account until you’ve paid off enough of your mortgage that they can be released from the agreement.
Alternatively, some people ask their guarantor to use a portion of their property’s equity as security for the mortgage. This carries great risk because if you miss payments, your guarantor is liable to pay and in the worst-case scenario, their home could be repossessed to settle your mortgage balance.
Thankfully there are UK lenders that do offer mortgages to people despite adverse credit issues like CCJs or missed payments. Bankruptcy is also an issue that causes concern for lots of the borrowers we help but again, there are niche lenders who are more equipped to provide loans under these circumstances.
It might be the case that to meet the eligibility criteria for a 5x salary mortgage lender with bad credit, you’ll need a larger deposit or will need to meet a minimum income threshold, though this will vary between lenders.
Discuss your situation with a broker before submitting any mortgage applications - a rejection can further negatively impact your credit score, which is something you’ll want to avoid.
The reason lenders do this is to reduce the risk of loss to them as the majority of people experience a drop in income when they retire. Furthermore, the older you get, the more likely you are to experience health issues that could prevent you from keeping up with your repayments.
If your mortgage term would take you into your retirement, your lender may have questions regarding how you’ll afford to repay your loan despite no longer being at work. However, it might be the case that your pension or savings are sufficient enough to repay your mortgage.
You’ll need to prove your income with payslips, bank statements from your current account and any savings accounts including a private pension. Your state pension can too be included as part of the affordability assessment for a mortgage.
If you’re approaching retirement, you might also want to consider an interest-only mortgage or equity release but that will depend on your unique circumstances and the lenders that are available to you.
Getting accurate information from a reviewed expert can help you weigh up the pros and cons of 5 x salary mortgages against other products, so you can decide what’s best for your unique situation.
If you’ve only been trading for a year or less, you might find that your choice of lenders is smaller and the rates won’t be as competitive but again, that’s going to be based on other factors like your credit history too.
Having 2-3 years of accounts gives lenders more information about your trading history and ability to generate steady income, which is why it’s preferable by many UK banks and mortgage providers.
Getting a mortgage for 5 x your income could be an option for you, whether you’re a contractor, freelancer or a limited company owner. Self-employed mortgage providers aren’t immediately visible when searching online because some deals are only provided via an intermediary, like a mortgage broker, so read reviews and contact an expert equipped to help.
The lending criteria for such lenders may be more demanding, requiring you to have a specific credit score, a larger deposit or an income above a certain threshold. Larger loans usually carry greater risk to the lender for loss as if you default, they could lose money in having to repossess and sell your home.
To improve your affordability for a larger loan based on more than 5 x your salary you could:
This guide explains what a 5x salary mortgage is, where you can find the lenders that offer them and how you can apply.
What is a 5x salary mortgage?
How much can I borrow with a 5x salary mortgage?
Will I be able to get a mortgage five times my income?
How does a 5x income multiple work if I want a joint mortgage?
How much deposit do I need for a 5 times income mortgage?
Can I get a 100% loan for a 5x salary mortgage?
Can I get a 5x salary mortgage with credit issues?
Can I get a mortgage 5 times my income if I’m an older borrower?
Can self-employed borrowers use a 5x income multiple?
Can I get a mortgage based on more than 5 times my salary?
Speak to a broker about applying for a mortgage for 5x your income
What is a 5x salary mortgage?
Mortgage lenders often use income multiples to work out the maximum amount they can loan to you.An income multiple is a figure based on a multiple of your annual salary, so if your annual gross salary was £30,000 and your lender used an income multiple of 5, you could potentially borrow £150,000.
However, lots of lenders will be wary about lending so much money in comparison to an income so don’t be surprised at the tighter lending criteria that comes with mortgage agreements with high-income multiples.
There are lenders out there that provide them and this could allow you to buy a bigger and more expensive property but like any mortgage product, there are some considerations for you to ponder, the most important being whether you can afford to borrow that much.
How much can I borrow with a 5x salary mortgage?
If you’re offered a 5x salary mortgage, how much you’re eligible to borrow will be dependent on how much you earn, though factors like bad credit and age can prevent some borrowers from being able to meet eligibility criteria for such loans.Always check if you’re eligible with a mortgage broker ahead of applying for a 5x salary home loan.
The following table illustrates how the loan size will vary based on income, and the difference between income multiples of 4.5 and 5 as examples:
Annual income | 4.5x salary mortgage | 5x salary mortgage |
£20,000 | £90,000 | £100,000 |
£40,000 | £180,000 | £200,000 |
£60,000 | £270,000 | £300,000 |
£80,000 | £360,000 | £400,000 |
£100,000 | £450,000 | £500,000 |
While comparison sites provide an overview of options, those options won’t necessarily be open to you as it’s your circumstances as a whole including the stability of your income and the type of property you’re buying that can affect your ability to meet the criteria for a specific product.
Will I be able to get a mortgage five times my income?
An income multiple of 5 is on the higher end of the scale and the majority of mortgage lenders offer lower multiples between 3-4.5. In contrast, there are a handful of lenders that may even extend to 6 or more - providing you meet their lending criteria.UK banks and lenders will look at numerous factors that affect your ability to repay your loan on time and in full including your:
Income
Monthly outgoings
Loan to value (LTV)
Source of deposit
Credit history
Age
Job type
The good news is that despite the added risk that some circumstances bring, there may still be a lender happy to approve a loan based on 5x your salary. It’s all about finding a lender with criteria that is open to your situation and applying for a loan that is affordable for you.
Every lender works to different eligibility criteria and perceives risk differently which can make the search feel frustrating, especially if you’re in a hurry and unsure where to even begin. That’s why the assistance of a broker can be invaluable.
How does a 5x income multiple work if I want a joint mortgage?
Applying for a joint mortgage can help to boost your borrowing power because both incomes can be included on the mortgage application, resulting in a larger loan.Imagine person 1 earns £30,000 a year and person 2 takes home £20,000. As a single applicant, the maximum amount person 1 could borrow for a 5x salary mortgage is £150,000. With the addition of applicant 2, the combined mortgage size increases to £250,000.
Two incomes can provide more security too and this can work in your favour with some lenders who may perceive the level of risk you pose as lower. After all, if one joint borrower were to lose their job, the income of the other borrower could help to support the finances of the household and potentially cover the mortgage.
How much deposit do I need for a 5 times income mortgage?
The amount of deposit you need will depend on the type of mortgage product you’d like to apply for. Residential mortgages typically have lower deposit requirements in comparison with buy-to-let mortgages which present more risk to a lender.Residential mortgage repayments are reliant on the income of the borrower whereas buy-to-let mortgage repayments are reliant on the borrower’s ability to find tenants to pay rent.
If you’re a residential buyer, you may be able to get a mortgage with just a 5% deposit, though some lenders will ask for 10%, meaning your loan-to-value rate would be 90%.
Having a higher deposit can help you to access better interest rates, so in some circumstances, it may be worth saving a little longer in order to pay less for your mortgage overall.
However, if you’re keen to get a 5 x salary mortgage with a 5% deposit, perhaps because you’ve seen a property you want to quickly snap up or you’re just eager to move, it may be possible.
For mortgages with larger LTVs, you typically need a clean credit record and good affordability for the size of the loan you are applying for.
Can I get a 100% loan for a 5x salary mortgage?
100% mortgages aren’t available although guarantor mortgages might provide an alternative if you’re struggling to raise a deposit.This type of mortgage could allow you to buy a property with a zero cash deposit too. Instead, to provide security for the loan, you’ll need a guarantor with either savings or residential property.
Loans at higher income multiples are riskier and risk is something that lenders try to avoid so your guarantor may need to deposit between 5-20% of your property’s value in a special savings account until you’ve paid off enough of your mortgage that they can be released from the agreement.
Alternatively, some people ask their guarantor to use a portion of their property’s equity as security for the mortgage. This carries great risk because if you miss payments, your guarantor is liable to pay and in the worst-case scenario, their home could be repossessed to settle your mortgage balance.
Can I get a 5x salary mortgage with credit issues?
It’s possible although severe issues and recent debts can limit your options as some lenders will point blank refuse to lend to borrowers with bad credit.Thankfully there are UK lenders that do offer mortgages to people despite adverse credit issues like CCJs or missed payments. Bankruptcy is also an issue that causes concern for lots of the borrowers we help but again, there are niche lenders who are more equipped to provide loans under these circumstances.
It might be the case that to meet the eligibility criteria for a 5x salary mortgage lender with bad credit, you’ll need a larger deposit or will need to meet a minimum income threshold, though this will vary between lenders.
Discuss your situation with a broker before submitting any mortgage applications - a rejection can further negatively impact your credit score, which is something you’ll want to avoid.
Can I get a mortgage 5 times my income if I’m an older borrower?
Some mortgage providers indeed have lending age caps in place, typically ranging from 70 - 85 but that won’t be the case for every lender.The reason lenders do this is to reduce the risk of loss to them as the majority of people experience a drop in income when they retire. Furthermore, the older you get, the more likely you are to experience health issues that could prevent you from keeping up with your repayments.
If your mortgage term would take you into your retirement, your lender may have questions regarding how you’ll afford to repay your loan despite no longer being at work. However, it might be the case that your pension or savings are sufficient enough to repay your mortgage.
You’ll need to prove your income with payslips, bank statements from your current account and any savings accounts including a private pension. Your state pension can too be included as part of the affordability assessment for a mortgage.
If you’re approaching retirement, you might also want to consider an interest-only mortgage or equity release but that will depend on your unique circumstances and the lenders that are available to you.
Getting accurate information from a reviewed expert can help you weigh up the pros and cons of 5 x salary mortgages against other products, so you can decide what’s best for your unique situation.
Can self-employed borrowers use a 5x income multiple?
It’s a common misconception that workers who receive their income from self-employment can’t get large mortgages but that’s not necessarily true. Providing you have a minimum of one years’ worth of accounts and you meet your chosen lender’s criteria, there’s no reason you shouldn’t be able to get a 5x salary mortgage.If you’ve only been trading for a year or less, you might find that your choice of lenders is smaller and the rates won’t be as competitive but again, that’s going to be based on other factors like your credit history too.
Having 2-3 years of accounts gives lenders more information about your trading history and ability to generate steady income, which is why it’s preferable by many UK banks and mortgage providers.
Getting a mortgage for 5 x your income could be an option for you, whether you’re a contractor, freelancer or a limited company owner. Self-employed mortgage providers aren’t immediately visible when searching online because some deals are only provided via an intermediary, like a mortgage broker, so read reviews and contact an expert equipped to help.
Can I get a mortgage based on more than 5 times my salary?
Yes, if your circumstances allow for you to meet eligibility criteria for a lender with 5.5 or even 6 x salary income multiples, then you could.The lending criteria for such lenders may be more demanding, requiring you to have a specific credit score, a larger deposit or an income above a certain threshold. Larger loans usually carry greater risk to the lender for loss as if you default, they could lose money in having to repossess and sell your home.
To improve your affordability for a larger loan based on more than 5 x your salary you could:
Improve your credit score
Avoid any mispayments for financial obligations such as credit cards, loans or bills
Save a larger deposit
Increase your income
Speak to a broker about applying for a mortgage for 5x your income
Call us on 02380 980304 or submit an online enquiry to speak directly to a mortgage broker. They’ll have access to a wide range of mortgage lenders and can check your eligibility for the ones that can offer mortgages for 5 x a salary or more.
If you’re eligible, they can show you how to apply and avoid the common mistakes made on an application. In fact, they can do all the paperwork for you to save you the job.
First Time Buyers Expert Article by
Nicola Schutrups
(Managing Director)
The Mortgage Hut