If you earn £135,000 per year, you have a strong financial base for securing a mortgage. However, your borrowing capacity depends on several factors beyond salary, including credit history, existing financial commitments, deposit size, and lender policies.
This guide will help you understand how much you can borrow, key factors affecting mortgage approval, and how to improve your borrowing power.
How Much Can You Borrow on a £135,000 Salary?
Lenders typically use an income multiple ranging from 3.5 to 5 times your salary to estimate mortgage affordability.
- 3.5x salary: £472,500
- 4x salary: £540,000
- 4.5x salary: £607,500
- 5x salary: £675,000 (offered by select lenders)
The exact mortgage amount will depend on creditworthiness, financial obligations, and lender criteria.
Factors That Impact Mortgage Affordability
Lenders consider more than just income when approving a mortgage. Below are the key factors that influence affordability:
1. Debt-to-Income Ratio
Lenders assess existing loans, credit card balances, and monthly financial commitments. The lower your debt-to-income ratio, the higher your borrowing capacity.
2. Credit Score and History
A good credit score enhances your chances of securing a mortgage at a competitive interest rate. A lower score may result in higher interest rates or reduced borrowing amounts.
3. Monthly Living Expenses
Lenders evaluate essential expenses such as bills, rent, childcare, and discretionary spending to determine how much of your income is available for mortgage repayments.
4. Deposit Size and Loan-to-Value (LTV) Ratio
A higher deposit lowers the Loan-to-Value (LTV) ratio, reducing lender risk and improving your access to better mortgage deals.
5. Employment Stability and Income Verification
Steady employment and a consistent income history increase lender confidence. Self-employed individuals may need to provide two or more years of financial statements.
Example Scenario: Buying a Home on a £135,000 Salary
If you earn £135,000 per year, have a 10% deposit, and limited outstanding debts, your potential borrowing capacity could look like this:
- Loan amount (4.5x salary): £607,500
- Deposit (10% of property price): £67,500
- Potential home price: £675,000
However, lenders may adjust your borrowing limits based on their individual affordability assessments.
How Your Deposit Affects Mortgage Options
Your deposit significantly impacts your mortgage affordability and lender options.
- 5% Deposit (£33,750) – Higher monthly repayments, fewer lenders available.
- 10% Deposit (£67,500) – More mortgage choices, improved interest rates.
- 20%+ Deposit (£135,000+) – Access to the best interest rates and lowest borrowing costs.
A larger deposit results in a lower Loan-to-Value (LTV) ratio, making your mortgage more affordable.
Government Schemes for Homebuyers
If you’re struggling to save for a deposit, government-backed home ownership schemes can help:
- Help to Buy Equity Loan – Offers a 20% loan (40% in London) for new-build properties with a 5% deposit.
- Shared Ownership – Enables buyers to purchase a share of a home and rent the remaining portion, with an option to increase ownership over time.
- First Homes Scheme – Provides 30-50% discounts on selected properties for first-time buyers and key workers.
These schemes make homeownership more accessible and reduce upfront costs.
How to Improve Your Mortgage Borrowing Power
To maximize your mortgage amount or secure better terms, consider these strategies:
- Lower Your Debt – Paying off outstanding loans and credit balances improves affordability.
- Boost Your Credit Score – Make timely payments, reduce credit utilization, and review your credit report for errors.
- Save for a Bigger Deposit – A larger deposit increases borrowing power and secures lower interest rates.
- Apply for a Joint Mortgage – Combining incomes with a partner can increase overall borrowing potential.
- Consult a Mortgage Broker – Brokers can help find lenders offering higher income multiples and flexible lending criteria.
Additional Costs to Consider When Buying a Home
Beyond mortgage repayments, homeownership comes with additional costs. Be sure to budget for:
- Stamp Duty – First-time buyers in England and Northern Ireland pay no Stamp Duty on properties up to £425,000.
- Legal and Conveyancing Fees – Covers property searches, contracts, and ownership transfers.
- Mortgage Arrangement Fees – Some lenders charge setup fees.
- Survey and Valuation Costs – Ensures the home is correctly valued and in good condition.
- Insurance and Moving Costs – Includes home insurance, removals, and furnishing expenses.
Planning for these costs ensures a smooth home-buying experience.
Choosing the Best Mortgage for Your Needs
Different mortgage options suit different financial situations. Common choices include:
- Fixed-Rate Mortgage – Offers stable monthly repayments over a set period.
- Tracker Mortgage – Linked to the Bank of England base rate, so repayments fluctuate.
- Interest-Only Mortgage – Lower monthly payments initially but requires a plan to repay the principal.
- Variable-Rate Mortgage – Monthly payments adjust based on lender rate changes.
Choosing the right mortgage depends on your long-term financial strategy and risk tolerance.
Final Thoughts: Can You Buy a Home on a £135,000 Salary?
A £135,000 salary provides strong mortgage affordability, but borrowing capacity depends on factors such as deposit size, existing debts, and lender policies.
With responsible financial planning, a stable income, and a sufficient deposit, you could qualify for a mortgage in the range of £472,500 – £675,000.
For expert mortgage advice and access to the best mortgage rates, working with a mortgage broker can help you secure the most competitive terms.
