3 times income and salary mortgages – The best lenders and how much you can borrow with a 3x multiple in the UK
Most mortgage providers use income multiples to determine how much money they will lend you to borrow for a mortgage. This will determine the amount of mortgage you are eligible for and the monthly payments.
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Many UK lenders will offer 3x mortgages depending on your circumstances. What does this mean for you? This guide will discuss 3x salary mortgage requirements and other factors impacting your ability to borrow for a mortgage.
Although one mortgage broker may decline you due to credit issues, there are options with another mortgage lender.
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What is meant by a 3x salary mortgage?
An ‘income multiplier’ is the figure mortgage lenders will multiply your annual income by determining the loan size they are prepared to offer to meet their lending criteria.
For example, if your annual income is £32,000 a year and a lender offers you a 3x salary mortgage, the maximum you would be able to borrow on the mortgage market is £96,000. If a different lender offers you an a 4.5x salary mortgage, you could borrow up to £144,000.
Is a mortgage three times your salary?
Not necessarily. While most UK mortgage brokers limit their lending based on your salary, they also consider other factors when calculating your affordability.
Mortgage providers typically offer mortgages to eligible borrowers based on 3-4 times their income. However, some lenders will extend loans higher if they have the right circumstances.
What is the maximum amount I can borrow for a 3x salaried mortgage?
The amount you can borrow if offered a 3x salary mortgage will depend on your income.
There is a significant difference between the mortgage sizes of income multiples.
If your salary is higher than your mortgage, you will be better off talking to a broker who can help you find lenders willing to lend more.
What is the minimum deposit required for a 3-times income mortgage?
Although 3x salary mortgages are quite common, lenders rarely offer loans that fully cover the cost of the property. The ‘loan-to-value’ (LTV) is the ratio of the amount you deposit to the size of the mortgage.
A 90% LTV (or 10% deposit) is sufficient for residential buyers. However, there are many other options. LTV 95% first-time buyer incentives are available.
Many lenders will offer 95 or 90% LTV mortgages. However, the greater your deposit, the more lenders you have access to and the less interest you’ll pay.
You will need a clean credit history and can afford high LTV mortgages for mortgage approval. Lenders may ask for a larger deposit if you have a negative credit history or other factors that could affect your ability to repay the loan.
Can I get a mortgage on three times my income?
Yes, most UK lenders will offer multiple of you salary if you meet certain conditions. Lenders assess your income and expenses, such as debt, LTV, property values, credit history, and lifestyle.
Income multiple issues may make it more difficult for lenders to accept you. However, they will likely be more willing to lend you money. Our experts have helped borrowers with all sorts of unique circumstances to obtain mortgages based upon x3 of their income.
Calculator to calculate mortgages for three times your salary
Use an online mortgage affordability calculator to determine how much you can borrow. To get an estimate, you only need to provide a few details. This calculator can be used to help you find properties that are within your price range:
What is the minimum deposit required for a 3-times income mortgage?
Lenders will also evaluate the property’s value. This is called the loan-to-value ratio (LTV). It refers to how much mortgage you are paying relative to the property’s worth.
If you have a £50,000 deposit on a home worth £200,000 and are looking to get a mortgage for 3 times that amount (£150,000), that 75% would correspond to 75% of the home’s value or an LTV of 75%.
How much you can borrow from a mortgage provider will vary depending on your approximate annual income, credit rating, and type of loan. To get a high LTV loan, you will need to have a good credit score.
However, our advisors can access specialist lenders that offer favourable deals for customers with bad credit.
How much mortgage can I afford?
Let’s say you have a salary of £40K, and you want a mortgage for three times that amount, totalling £120k. Most mortgage lenders will help you, but you must be eligible.
They will examine factors such as your credit history, other debts, and outgoings. Their primary concern is reliable repayment.
Most mortgage lenders consider external factors such as your age, family size and history of monthly repayments.
The mortgage introducer will ask you to provide bank statements and the most recent pay slips as proof of income.
What if I have credit problems and can’t get a 3x mortgage on my salary?
Every lender has its own rules and regulations. Some lenders will refuse applicants with bad credit records, but specialist finance lenders may consider other factors and offer loans at a higher interest rate.
The lenders’ perceptions about your ability to repay the loan on time and promptly, as well variables like the amount of your deposit, will determine the results.
However, lenders might be more inclined to accept certain types of credit if you borrow only x3 your monthly salary. This is because it is considered a low-income multiple.
See our bad credit mortgages section for more information. To get specialist advice from an exclusive mortgage expert, you may want to send an enquiry.
Can I get a mortgage on a unique property?
You can find unique properties with concrete walls, a timber frame, and thatched roofs.
Remember the LTV? The LTV ratio is the amount of money you can borrow to finance a mortgage on non-standard properties. These properties are not serviceable by most lenders.
You can find more information in our section about non-standard construction mortgages.
Can I get a mortgage that is three times my monthly income for retirement/later life?
Some mortgage lenders won’t lend money to people over 75, while others will not lend to those over 85.
A minority of mortgage lenders will lend to retirees as long as they are certain the mortgage can be serviced.
Even if your age is within the appropriate range, you may still be subject to a short repayment term.
Lenders expect your income to decrease with age (retirement, redundancy), and they fear you will default on term repayment.
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What does the 3x income multiplier mean if I want to get a joint mortgage?
When applying for a joint mortgage, most lenders will consider your household income when determining your affordability.
This means that you can borrow much more than you could as a single applicant.
One person earns £20,000 annually, while the other takes £18,000.
The maximum amount a single applicant can borrow for a 3x mortgage on a salary is £60,000.
The combined mortgage amount increases to £114,000.
Is it possible to determine mortgage affordability by multiplying your income?
Although income multiples can be a useful benchmark for mortgage providers, lenders are increasingly moving away from this method to calculate maximum borrowing. They instead use a set of rules that establish applicants’ affordability.
This is done by calculating your ratio of debt to income. This is a measure of your income and outgoings. A lower DTI is better as it shows lenders that you have more income. Most lenders prefer that your DTI be below 43%.
While income is important, affordability is far more important in determining whether you are eligible for a 3x mortgage.
Miscellaneous situations
The preceding section was about getting a mortgage for three times your normal salary. Sometimes, you might need a mortgage three times your salary in exceptional circumstances.
These include:
- Purchase-to-let mortgages – Example: You’re a landlord seeking a mortgage that is at least three times your annual income to purchase and renovate a property for rent. These loans come with their complications, as BTL mortgages are usually assessed on projected rental income.
- Second mortgages – Lenders review details such as your credit history, income, and outgoings to determine if you can afford the loan. This is not just for this second property but also for your first.
- Self-employed – A specialist loan lender may be necessary if you are looking for a self-employed mortgage or a freelancer. Lenders want to see proof that you will repay them. This is why self-employed people who have worked for less than three years may find it harder to secure a mortgage. Some lenders specialise in working with self-employed customers.
You should talk to a specialist broker if you are looking for an 3 times salaried mortgage.
These are the top reasons to speak with one of our expert affordability brokers.
We provide 5-star service and access to experienced brokers who can help with a mortgage application and the best mortgage term for you.
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