Are you earning £35,000 per year and wondering how much you can borrow for a mortgage? Understanding your borrowing potential is essential when planning to step onto the property ladder. Lenders use various factors to determine how much you can borrow, including your income, credit history, and financial commitments.
In this guide, we’ll explore the mortgage amount you may qualify for, key affordability factors, and how to improve your borrowing potential.
How Much Mortgage Can You Get on a £35,000 Salary?
Mortgage lenders typically use an income multiple to determine borrowing potential. Most UK lenders offer between 3.5 to 5 times an applicant’s annual salary, depending on affordability assessments.
- 3.5x salary: £122,500
- 4x salary: £140,000
- 4.5x salary: £157,500
- 5x salary: £175,000 (less common and subject to lender discretion)
The actual amount you can borrow depends on your personal circumstances, including your credit score, existing financial commitments, and deposit size.
Factors That Affect Your Mortgage Affordability
Lenders assess more than just your salary when deciding how much they are willing to lend. Some key considerations include:
1. Debt-to-Income Ratio
Your monthly financial obligations, including car loans, personal loans, and credit card repayments, affect your borrowing capacity. Lowering your existing debts can increase your mortgage affordability.
2. Credit Score
A higher credit score indicates responsible financial behaviour and can increase your chances of securing a mortgage with better terms. If your credit score is low, consider improving it before applying.
3. Living Expenses
Your monthly expenses, such as rent, utilities, and general spending habits, play a role in how much a lender is willing to offer. Lenders will ensure that you can comfortably afford repayments alongside your other financial commitments.
4. Deposit Size
The size of your deposit significantly impacts mortgage affordability. A higher deposit reduces the loan-to-value (LTV) ratio, often leading to better mortgage deals and lower interest rates.
5. Employment Stability
Lenders prefer applicants with a stable job history. If you have been employed for several years in the same industry, you may be viewed as a lower-risk borrower compared to those with irregular income sources.
Example Scenario: Buying a Home on £35,000 Salary
Let’s assume you have a £35,000 annual income, minimal debts, and a 10% deposit saved:
- If a lender offers 4.5x your salary, you may borrow £157,500.
- With a 10% deposit (£17,500), you could afford a home priced at £175,000.
However, if you have outstanding debts or higher living expenses, lenders may lower the amount they are willing to lend.
How Your Deposit Affects Your Mortgage Options
The size of your deposit plays a crucial role in determining the mortgage deals available to you. Here’s how different deposit amounts impact your options:
- 5% Deposit (£8,750) – Higher mortgage repayments and limited lender options.
- 10% Deposit (£17,500) – Access to better rates and lower monthly payments.
- 20%+ Deposit (£35,000+) – Best mortgage deals with lower interest rates and more favourable terms.
A higher deposit decreases the Loan-to-Value (LTV) ratio, which in turn reduces lender risk and improves affordability.
Government Schemes for First-Time Buyers
If saving for a deposit is a challenge, you may be eligible for government-backed schemes designed to support homebuyers:
- Help to Buy Equity Loan – Offers an additional 20% loan (40% in London) for new-build properties with just a 5% deposit.
- Shared Ownership – Allows you to purchase a share of a property and pay rent on the remaining portion, with the option to increase ownership over time.
- First Homes Scheme – Discounts new-build properties by 30-50% for eligible first-time buyers and key workers.
These schemes can make homeownership more accessible by reducing the upfront financial burden.
Improving Your Borrowing Potential
If you want to increase the amount you can borrow or secure a better mortgage deal, consider these strategies:
- Reduce Existing Debts – Lower your debt-to-income ratio by paying off outstanding loans.
- Improve Your Credit Score – Ensure timely bill payments, correct any credit report errors, and avoid maxing out credit cards.
- Increase Your Deposit – A larger deposit can enhance your mortgage affordability and reduce monthly repayments.
- Explore Joint Mortgages – Applying with a partner or family member can increase your combined borrowing power.
- Work with a Mortgage Broker – A broker can help you find lenders who offer higher income multiples or more flexible lending criteria.
Other Costs to Consider When Buying a Home
Purchasing a home involves more than just mortgage repayments. Consider these additional costs:
- Stamp Duty – First-time buyers in England and Northern Ireland pay no stamp duty on properties up to £425,000.
- Mortgage Arrangement Fees – Some lenders charge fees for setting up a mortgage.
- Surveys & Valuations – Necessary to assess the property’s value and condition.
- Legal & Conveyancing Fees – Covers essential property searches and legal paperwork.
- Insurance & Moving Costs – Budget for home insurance, removals, and new furnishings.
Factoring in these expenses ensures you are financially prepared for homeownership.
Choosing the Right Mortgage Type
Different mortgage products cater to different financial needs. Here are some common options:
- Fixed-Rate Mortgage – Locks in an interest rate for a set period, offering stability.
- Tracker Mortgage – Interest rate follows the Bank of England base rate, which can fluctuate.
- Interest-Only Mortgage – Lower monthly payments initially but requires a repayment plan for the principal.
- Variable-Rate Mortgage – Interest rates may change, affecting monthly repayments.
Choosing the best mortgage depends on your long-term financial goals and risk tolerance.
Final Thoughts: Is a £35,000 Salary Enough for a Mortgage?
A £35,000 salary provides a strong foundation for securing a mortgage, but the actual amount you can borrow depends on your financial health, deposit size, and lender criteria.
With a good credit history, manageable debts, and a stable income, you could qualify for a mortgage between £122,500 – £175,000.
For expert guidance and access to the best mortgage deals, consulting a mortgage broker can help you navigate the home-buying process with confidence.
